According to Fed, it’s going to focus on the totality of data in the coming few months before making a sure end decision on the next policy. This employment report, which is going to release tomorrow Friday will have much impact on monetary policy of United States. The unemployment rate of the country climbed to 4.0, wage growth reduced to 1.3% including the nonfarm pay roles that jumped to 304k in the month of February.
It is likely to say that the unemployment rate will edge back down this month and expected to be at 3.9%. Fed is going to keep a close eye on labour force participation and will try to increase the wage growth to 3.3%. The expectations will always to deliver good outcomes to continued job and stronger labour force growth with improving wage rate. Although the Fed is clear to make no rush to make another important policy decision.
It is expected that the potential growth is lesser than 2 percent as last year’s. But with actual growth rate equal to potential growth with low employment rates is already a good sign for leading economies. If growth is higher than expected, they need to thrust the policy a little higher. If growth is weaker, rates will head down leading to good potential growth in Indian economy. Overall, the employment report is expected to fall down in upcoming days.