Wednesday preview: UK jobs, Fed meeting minutes

UK jobs data from the Office for National Statistics on Wednesday is expected to show a slowdown in hiring ahead of Britain’s European Union referendum on 23 June.

Economists forecast employers added 153,000 jobs to the economy in the three months to June, compared to 176,000 in the three months to May.

The unemployment rate is expected to remain at 4.9% during the period. The rate had fallen to 4.9% from 5% in the quarter to May.

Average weekly earnings, including bonuses, in the three months to June are estimated to have grown 2.4% year-on-year, following a 2.3% increase in the previous period.

“However, we expect a slight rise in the claimant count in July as firms become more wary of hiring, given increased uncertainty,” said HSBC analysts.

HSBC forecasts jobless claims rose by 9,000 in July following a 400 increase in June. The claimant count rate is predicted to remain at 2.2%.

After the closing bell, the Federal Reserve publishes the minutes of its 26-27 July policy meeting when it decided to keep measures unchanged. The minutes will provide more information behind the Fed’s latest policy decision and may offer clues on the timing of the next interest rate hike.

The FOMC provided a more optimistic tone at its July meeting, saying that near-time risks to the economic outlook had diminished. However, below-target inflation, a global economic slowdown and uncertainty over the impact of Brexit saw the Fed holding fire on raising interest rates.

Fed policymakers at the time said they would continue to closely monitor inflation data and global economic and financial developments.

“The Fed has deviated quite a lot from their original path of rate hikes due to sluggish growth around the globe,” said Naeem Aslam, chief market analyst at Think Markets UK.

“Investors will be looking very closely at how the Fed’s minutes can help them understand their stance with regards to the economy and if another rate hike could be introduced this year.

“Given the uncertainties around the US elections, the Fed may hold their fire with respect to another rate hike for this year.”

Wednesday 17 August

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INTERNATIONAL ECONOMIC ANNOUNCEMENTS
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