微妙"非农与通胀数据前夜风暴预警

Two consecutive hurricanes that made landfall in the United States, along with the Boeing strike, may distort the inflation and non-farm employment data to be released this week, adding more uncertainty to the upcoming U.S. elections and the Federal Reserve's interest rate decision.

On Thursday and Friday, the U.S. September PCE price index and the October non-farm report are about to be released. Just four days later, on November 5th, is the U.S. election, and two days after the election, the Federal Reserve will make an interest rate decision.

Analysis points out that the impact of these events on economic data is temporary, and a rebound may occur in the coming months. However, due to the special timing, these economic data may be politicized before the election, thereby affecting voters' perceptions. The impact of hurricanes on the data will also influence the Federal Reserve's decision to lower interest rates.

The hurricanes and the Boeing strike are expected to significantly reduce the U.S. non-farm employment data for October, but the impact on the unemployment rate may be limited. This means that the Trump team may seize on the weakness of job growth to make a big fuss, while the Harris team will emphasize the stability of the unemployment rate.

Advertisement

Regarding the Federal Reserve's interest rate cut, the market currently expects it to cut by 25 basis points on November 7th. However, media analysis points out that if the employment report is so weak that it cannot be explained solely by the hurricane effect, it may raise the expectation of an interest rate cut.

Hurricanes + strikes, employment is expected to decrease significantly

In September, the category 4 hurricane "Helen" swept through Florida, becoming the deadliest hurricane to hit the U.S. mainland since Hurricane Katrina. Just two weeks later, Hurricane "Milton" struck, the strongest storm Florida has encountered in over a century.

The storms led to the closure of stores, factories, and construction sites, coupled with the Boeing strike during this period, which will have an impact on the labor market.

The U.S. Department of Labor compiles non-farm employment data by surveying U.S. employers on how many employees are on their payrolls during the payment period, including the 12th of the month. The Boeing strike began on September 13th, "Helen" made landfall on September 26th, and "Milton" made landfall on October 9th, meaning these events will all affect the October data.

The current market consensus forecast is for an increase of 110,000 non-farm jobs in October, a significant decrease from the 154,000 in September.In a speech in mid-October, Federal Reserve Governor Waller stated that he expected hurricanes and the Boeing strike to reduce job growth by more than 100,000 positions. Goldman Sachs, based on unemployment claims, damage estimates, and past hurricane impacts, calculated that hurricanes alone would reduce job growth by 40,000 to 50,000 positions. J.P. Morgan estimated around 50,000, while Barclays predicted between 50,000 and 60,000.

The impact of hurricanes and the Boeing incident on the unemployment rate is estimated to be limited, as respondents who have jobs but do not work due to bad weather are still considered employed, and striking workers are also considered employed. Currently, economists expect Friday's report to show that the unemployment rate for October remains at 4.1%, unchanged from September.

Wages may be skewed upward. This is because hourly workers are more likely to lose wages when a storm hits compared to salaried workers, who tend to have higher incomes. This results in a higher average compensation.

Meanwhile, due to shortages caused by hurricanes, inflation may rise slightly. The storms also destroyed many vehicles, with Moody's estimating insurance auto losses between $3 billion and $5 billion. Auto insurance rates in states affected by the hurricanes will also rise, and the demand for replacement cars may halt the downward trend in new and used car prices that has been observed over the past year.