Core Viewpoint - Danske Bank analysts indicate that the rise in the US unemployment rate is not sufficient to provide a strong signal for the Federal Reserve to clearly lower interest rates, and they still expect the Fed to remain on hold in December [1] Summary by Category - **Economic Indicators** - The US unemployment rate has increased, but this change is not seen as a decisive factor for the Federal Reserve to implement interest rate cuts [1] - **Federal Reserve Outlook** - Analysts from Danske Bank maintain the expectation that the Federal Reserve will not make any changes to interest rates in December [1]

Core Insights - In September 2025, both the new non-farm employment figures and the unemployment rate in the U.S. exceeded expectations, indicating a divergence between these two key indicators [1] - The unemployment rate, which rose to 4.44% in September, is considered a more reliable data point compared to the potentially revised new employment figures, making it crucial for the Federal Reserve's decision on interest rate cuts in December [1] - The unemployment rate has increased for three consecutive months, suggesting that the Fed may struggle to justify a lower unemployment rate in October and November, which could exceed 4.5% [1] - The September non-farm report is not the final employment data before the December meeting, and ongoing weakness in the job market is expected to be reflected in subsequent economic data [1] - Among the 12 voting members for the December meeting, doves still hold a majority, leading to the expectation that a rate cut of 25 basis points may be a close call [1]

Group 1 - The U.S. Labor Department reported that 119,000 jobs were added in September, with an unemployment rate of 4.4% [1] - The previous two months' employment data were revised downwards, with July's job additions adjusted from 79,000 to 72,000 and August's from 22,000 to a decrease of 4,000, totaling a reduction of 33,000 jobs for July and August [1] - Employment in healthcare, dining, and social assistance sectors continued to rise, while transportation and warehousing, along with federal government jobs, saw declines [1] Group 2 - The average hourly wage for non-farm employees in September was $36.67, reflecting a month-over-month increase of 0.2% and a year-over-year increase of 3.8% [1] - Due to the federal government shutdown, data collection was interrupted, leading to the absence of the October non-farm employment data, which will be reported alongside November's data on December 16 [1] - Economic indicators suggest that while the U.S. economy appears stable, there are increasing signs of pressure, including a slowdown in hiring, reduced consumer spending, and rising inflation [2]

Core Insights - The consumer confidence index in the U.S. dropped to 50.3 in November, the lowest level since June 2022, down from 53.6 in October, and below the forecast of 53.2 [1][2] - Concerns about the prolonged government shutdown are affecting households across different political affiliations, leading to fears about its negative impact on the economy [1] - Millions of low-income families have seen welfare benefits, including food stamps, cut due to the government shutdown, and hundreds of thousands of federal workers are either furloughed or working without pay [1] Labor Market Concerns - The proportion of American households expecting an increase in unemployment over the next year rose from 52% in October to 62%, the highest level since 1980 [2] - A survey by the New York Federal Reserve indicated that respondents expect unemployment to rise in the coming year and believe it will be difficult to find a job if they become unemployed [2]

Core Viewpoint - Prudential expects the Federal Reserve to implement two interest rate cuts within the next six months before a new administration takes over [1] Group 1: Interest Rate Expectations - Prudential's fixed income head, Kenneth Orchard, indicates that the market has a more aggressive outlook on the number of rate cuts, leading to expectations of higher short- and medium-term U.S. Treasury yields [1] - The Federal Reserve would need to lower rates to significantly below 3% to see a decline in the front and middle of the yield curve, as the market has already priced in multiple rate cuts [1] Group 2: Inflation Outlook - Prudential anticipates that U.S. inflation will not decrease, projecting it to remain between 3% and 3.5% over the next 12 months, contrary to market expectations of a decline [1] - There is a growing trend of U.S. Treasury bonds being held by price-sensitive investors, which may impact market dynamics [1] Group 3: Employment Situation - Although the U.S. unemployment rate has seen a mild increase recently, it does not indicate an impending recession, as maintaining approximately 40,000 jobs per month is sufficient to keep employment stable [1]

Group 1 - The Federal Reserve Chairman Jerome Powell indicated that the U.S. unemployment rate remains low but has slightly increased, while inflation has risen and is still at a slightly elevated level. Inflation risks are on the rise, and employment risks are on the decline. Most inflation expectation indicators are expected to align with the 2% target after next year. Price increases driven by tariffs are anticipated to continue this year and next [2]. - Powell emphasized that the Federal Reserve should observe the developments in tariffs, inflation, and the labor market before deciding to lower interest rates. The latest FOMC meeting minutes revealed that the Federal Reserve decided to lower the federal funds rate target range by 25 basis points to between 4.00% and 4.25%. This marks the first rate cut since December 2024 [3]. - When asked about the potential impact of White House economic advisor Stephen Milan joining the Federal Reserve on its independence, Powell stated that the Federal Reserve is "firmly committed" to maintaining its independence from political influence [2].

Group 1 - The initial response rate of the August non-farm survey rebounded significantly, but the trend of employment deterioration has not stopped, with private sector job additions contracting for four consecutive months [1] - The total non-farm job additions from May to August were only 107,000, which is below the average monthly growth of 127,000 in the first four months of 2025 [1] - The unemployment rate rose from 4.248% to 4.324%, primarily due to a slight recovery in labor force participation [3] Group 2 - The Kansas Fed President stated that there is no need to adjust interest rates, despite the region's employment situation being the worst in the country [6] - The employment situation in the manufacturing sector, sensitive to tariffs, has been declining, indicating potential further job losses in this area [8] - The U6 unemployment rate and the unemployment rate for African Americans have shown significant increases, highlighting structural vulnerabilities in the labor market [11] Group 3 - The combination of declining full-time employment, rising part-time employment, and increasing permanent unemployment has accumulated greater risks for a jump in the unemployment rate [7] - The labor market is facing structural issues, with young individuals lacking skills and experience struggling to find jobs, while undocumented immigrants are hesitant to work due to political climate [16] - The trend of rising unemployment is likely to continue, even if the U.S. economy does not enter a recession [16]

Core Viewpoint - The U.S. labor market shows signs of weakness, with the unemployment rate rising to 4.3% in August, the highest in nearly four years, and non-farm payrolls increasing by only 22,000, significantly below expectations [1][1][1] Employment Data - The unemployment rate increased by 0.1 percentage points from the previous month, reaching 4.3% [1] - Non-farm employment growth was only 22,000 in August, a sharp decline from the revised 79,000 in July and well below the market expectation of 75,000 [1][1] - The report confirms a trend of weakness in the U.S. labor market, as evidenced by the rising unemployment rate and disappointing job growth figures [1][1][1] Revision of Previous Data - The non-farm payroll figures for May and June were also significantly revised downward, indicating a broader trend of labor market deterioration [1]

Core Viewpoint - The article discusses the potential for the Federal Reserve to initiate a small interest rate cut in September, influenced by rising inflation data and pressure from the White House, despite the current economic indicators not supporting a large-scale reduction [1][4]. Economic Indicators - The latest Consumer Price Index (CPI) for July shows a year-on-year increase of 2.7%, with the core CPI rising by 3.1%, indicating that inflation remains above the Fed's target of 2% [1]. - The Personal Consumption Expenditures (PCE) price index, which the Fed closely monitors, was reported at 2.6% for June, up from 2.4% and 2.2% in previous months, justifying the Fed's decision to maintain interest rates [2]. - The unemployment rate in July was stable at 4.2%, a significant decrease from the peak of 14.8% in April 2020, suggesting a recovery in the labor market [3]. Government Debt and Fiscal Concerns - The U.S. government is approaching a "technical default," with projections indicating that 30% of government revenue in fiscal year 2025 will be allocated to debt interest payments, exacerbating the fiscal deficit [4]. - The ongoing high-interest payments on national debt create a paradox with the Fed's high interest rates, leading to concerns about the sustainability of U.S. fiscal policy and potential market reactions [4]. Market Reactions - Since April, there has been a notable sell-off of ten-year U.S. Treasury bonds, reflecting growing market anxiety regarding the U.S. debt repayment crisis and the sustainability of government revenue [4].

Group 1 - The U.S. labor market is experiencing a significant slowdown, with July non-farm payrolls adding only 19,000 jobs, the lowest in nine months, and previous months' data revised down by 258,000 jobs [1][2] - The unemployment rate remains stable, with a slight increase of 0.1 percentage points in July, indicating that despite low job growth, the labor market is not in a state of crisis [3][4] - Labor force participation has been declining since May, with a total decrease of 0.5 percentage points year-on-year by July, reaching the lowest level since November 2022 [4][5] Group 2 - The Federal Reserve maintained interest rates at the end of July, but there were notable dissenting votes from two board members, highlighting internal divisions regarding monetary policy in light of the employment data [2][3] - The PCE price index showed a rebound, with a quarter-on-quarter increase of 2.1% in Q2, suggesting that inflation pressures are still present, albeit at a moderated level [5] - The quality of employment is declining as the actual number of employed individuals decreases, with long-term unemployment rising to 1.83 million, the highest level since 2017, excluding the pandemic [4][5]