Flash: Eye’s on Bernanke - DBS

FXstreet.com (London) - DBS Bank Research Group noted that the labour market is anything but strong. An area in focus as the markets listen for signs wen tapering might commence as we approach FOMC this afternoon.

They said, "Nonfarm payrolls have averaged but 155k for the past three months and, unusually for payrolls, there are no spikes (up or down) in the data; three months ago the same figure stood at 233k. Jobless claims have become stuck at 345k (4wma)for 6 weeks and, judging from history, seem unlikely to fall lower. The labour components of both ISM surveys have dropped to 50.1 – one tick away from ‘negative’ territory.” They explain this is key for Bernanke, as unemployed workers continue to drop out of the labour force. The proportion of Americans not participating in the labour force has risen to a 35-year year high of 36.7%. Meanwhile, inflation continues to fall. Economically, they suggest that Bernanke’s message to his colleagues will be: if you’re looking at the data, your timetable for tapering must be further away today than it was 6 weeks ago.