Unemployment rates held steady in October, as the US economy added 12,000 jobs, far fewer than the 100,000 expected as recent hurricanes and strikes weighed on the data. Mizuho Securities US chief economist Steven Ricchiuto joins Seana Smith and Brad Smith on Morning Brief to discuss the data and what it means for the Federal Reserve ahead of next week’s meeting.
“The employment numbers have to be taken against the backdrop in all the noise that’s been involved in the series,” Ricchiuto says, explaining, “The net of this is it tells the Federal Reserve that you don’t have to rush to go back to where you think neutral is. You’ve got a fundamentally healthy economy, and jumping on the back of a weak payroll employment number after a fairly solid payroll employment number, I think, would be a mistake.”
The economist says he thinks that the Fed should hold rates steady at the November meeting. “I think they should wait. I think they should go on a very, very steady program. They shouldn’t get the market convinced they have to go every meeting, and I think this is an opportunity for them to do that.”
Ricchiuto continues, saying “There’s no reason to rush. There’s no reason to convince the market we got to get there quickly. You’re better off doing this in a programmatic, step-by-step function where you take time to continue assessing data. And clearly, jumping in on the backdrop of a number that is influenced by [recent hurricanes and labor strikes] certainly doesn’t add to the equation. It could actually push long-term rates up.”
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This post was written by Naomi Buchanan.
