Institutions: Lower-than-expected non-farm payroll data provides fodder for Fed doves, but recent factors may weaken the necessity for rate cuts

Odaily News According to David Rees, Global Head of Economics at Schroders, the non-farm payroll data coming in significantly below expectations will provide discussion points for the dovish faction within the Federal Reserve. However, at least part of the shortfall is attributed to strike activity in the healthcare sector, a situation that is expected to reverse. Furthermore, despite the weak employment report, we believe that sustained growth in labor demand is inevitable given the ongoing robust growth of the US economy. It remains unclear whether Kevin Warsh, the incoming Federal Reserve Chair, will alter his view that the application of artificial intelligence will significantly enhance US productivity and create room for lowering interest rates. However, any recovery in the job market, coupled with inflation risks stemming from events in the Middle East, could weaken the necessity for rate cuts in the near term. (Jin10)