US Employment Recovery Gains Momentum...Calls for Early Tapering Grow Louder

Possible Mention at Jackson Hole Meeting
Rising Treasury Yields and Strong Dollar

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] News that the U.S. employment recovery is gaining momentum has been continuously reported, increasing the possibility of the Federal Reserve's (Fed) tapering (reduction of asset purchases). There are also forecasts that signals of tapering may emerge at the Jackson Hole meeting at the end of this month. The market is already preparing for tapering.

The U.S. Department of Labor announced on the 9th (local time) through the June Job Openings and Labor Turnover Survey (JOLTS) that the number of job openings in June was recorded at 10.1 million. The June job openings significantly exceeded May's 9.48 million as well as the Dow Jones consensus forecast of 9.1 million.

This result is the highest ever since statistics began in 2000. It is also the first time the number exceeded 10 million. As demand for personnel in the restaurant and distribution sectors increased, companies posted more new job openings.

Employment also showed an increasing trend. Employment in June was 6.7 million, an increase of 697,000 from the previous month. The hiring rate, which indicates the ratio of hires to total employment, rose to 4.6% from 4.2% in the previous month. Peter McElroy, a JP Morgan analyst, explained, "Although the situation has somewhat eased, the ratio of job openings to hires has remained historically high."

Following July's new employment exceeding expectations at 940,000, and with job openings also reaching a record high, Fed officials are calling for early tapering.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, mentioned the increase of 940,000 jobs last month and said, "If this growth continues for another month or two, it would represent 'substantial progress' toward our goals, and we should start thinking about new policies."

Eric Rosengren, President of the Federal Reserve Bank of Boston, also predicted in an interview with the Associated Press that tapering could begin this fall if the employment boom continues.

Amid pressure from 'hawks,' attention is focused on whether Fed Chair Jerome Powell will signal tapering at the Jackson Hole meeting at the end of this month. Chair Jerome Powell has previously stated that employment data improvement must be confirmed before deciding on tapering.

Bloomberg News reported that Wall Street's interest is at its peak regarding whether tapering will be mentioned at the Jackson Hole meeting.

The market is already moving toward normalization of monetary policy. On this day, the U.S. 10-year Treasury yield rose to 1.324%.

Although the U.S. Treasury yield fell to 1.127% last week, it reversed to an upward trend reflecting expectations of employment recovery. A rise in Treasury yields means a decline in Treasury prices.

The U.S. dollar also showed strength. On this day, the dollar index rose to 93, the highest since early May.

This content was produced with the assistance of AI translation services.