Intensification of the "Eagle Pigeon War"? Fed Governor Bowman: The U.S. job market has not yet recovered

Employment data becomes the key...

This article is partly from the Financial Associated Press, Golden Ten Data Integration Report

On Tuesday, local time, Fed Governor Bowman said that it will take a while for the US labor market to recover from the impact of the new crown epidemic, and more work needs to be done to get the economy back on track.

Bowman said that while the number of new jobs added to the labor market recently is encouraging, overall employment is still below pre-pandemic levels, and many people are still facing difficult choices for employment and job change, so it will take time for some people to re-enter the labor market.

San Francisco Fed President Daly made a similar point on Tuesday, noting that nearly 10 million people are still unemployed in the United States, with many more currently on the sidelines of the labor market.

Daly said that there are many factors affecting the job market today, some parents need to take care of their children, some people are worried about the new crown virus, and the federal government provides unemployment benefits, but these factors will not last forever, and most of these people will return to work as the economy recovers further.

Bowman and Daly's speeches suggest that there are serious divisions within the Fed. Earlier, Fed Governor Waller and St. Louis Fed President Bullard both said they believe the job market recovery is nearing completion and the Fed should start scaling back on bond purchases as soon as possible.

For now, the Fed is still working on at least $120 billion a month in debt purchases, including $80 billion in Treasury bonds and $40 billion in MBS.

The U.S. Department of Labor will release July non-farm payrolls data on Friday, and the market expects the U.S. to add 788,000 new jobs in July.

As the market speculates about when the Fed will launch taper, financial blog ZeroHedge quoted Bloomberg commentator Vincent Cignarella as saying that to judge when the Fed is likely to start tapper, the relative relationship between the labor force participation rate and job vacancies, and the relative relationship between the non-farm payrolls and the month-on-month change rate of initial jobless claims, can be used as a signal.

He concluded that the Fed's actions were already lagging behind, and that the Fed's backwardness could increase if inflation deepened.

Source: Golden Ten Data