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2025-10-29 16:52:54
[US Employment Data May Influence the Fed's Policy Path] ⑴ Preliminary data released yesterday by ADP showed that the US added an average of 14,250 jobs per week in the four weeks ending October 11, 2025, equivalent to a cumulative increase of approximately 57,000 jobs over four weeks. ⑵ The Dallas Fed estimated earlier this month that the current break-even point for the job market is about 30,000 jobs per month; the 57,000 figure is far higher. ⑶ Fed Governor Waller, one of the most dovish members, cited ADP data as one of the reasons for supporting interest rate cuts in his July speech. ⑷ However, he recently stated that he still believes interest rate cuts are necessary but caution is needed, pointing out the contradiction between robust economic growth and a weak labor market. ⑸ If the ADP data does indeed show a strong rebound, Fed Chairman Powell may be more cautious about signaling a rate cut in December. ⑹ Such a hawkish surprise will have a significant impact on the market. ⑺ In the absence of government data, both the ADP data and the US Purchasing Managers' Index indicate strong economic activity. (8) The latest dot plot shows that the majority of Federal Open Market Committee members hold a neutral/hawkish stance, far exceeding the number of dovish members. (9) Without strong supporting reasons, these members will be the first to question a December rate cut. (10) Prior to the release of this data, the market generally believed that the outcome of today's Fed meeting was a foregone conclusion, with rate cuts and the end of quantitative tightening already fully priced in.
