This page has been archived and commenting is disabled.

Goldman: "No Rate Hike In September"

Tyler Durden's picture




 

While we have exposed the ugly under-belly of today's jobs data, mainstream media is spinning it as a 'Goldilocks' report with enough hits-and-misses for every hawk or dove. The market's initial reaction signals rising expectations of a September rate hike but, as Goldman's Jan Hatzius explains, they continue to expect the FOMC to keep policy rates unchanged at the September 16-17 meeting.

Via Goldman Sachs,

BOTTOM LINE: Nonfarm payroll employment increased less than expected in August, although earlier months were revised up. The unemployment rate and broader measures of underemployment declined. We continue to expect the FOMC to keep policy rates unchanged at the September 16-17 meeting.

MAIN POINTS:

1. Nonfarm payroll employment increased by 173k in August, less than expected by the consensus of economists. The deceleration relative to July reflected a downshift in a variety of components, including manufacturing (-17k vs +12k previously) and retail trade (+11k vs +32k previously). The mining sector continued to shed jobs (-9k in August). Overall private payrolls expanded by 140k, down from 224k in July. Firmer government payrolls provided a partial offset, with gains of 33k in August, an acceleration from +21k in July.

2. Other details in the establishment survey were a bit more encouraging. First, payroll growth over the two prior months was revised up by a net 44k. Second, average weekly hours increased to 34.6, and the index of aggregate hours (i.e. employment multiplied by average weekly hours) has now increased at an annualized rate of 3.1% over the past three months. Third, average hourly earnings growth was also slightly better than expected, rising by 0.3% month-over-month and 2.2% from a year earlier.

3. Results from the household survey were mostly positive. The U3 unemployment rate fell to 5.1% (5.112% unrounded) from 5.3% in July, and the broader U6 underemployment rate fell to 10.3% from 10.4%. Household employment increased by a decent 196k (+106k on a payrolls-consistent basis), although the trends in employment growth from this survey remain relatively soft (with three- and six-month average gains of 80k and 123k, respectively). The labor force participation rate was unchanged at 62.6%.

4. With payrolls, unemployment claims, consumer sentiment, vehicle sales, and a number of business surveys in hand, our preliminary read on the August Current Activity Indicator is +2.8%, in line with the July figure. We continue to expect the FOMC to keep policy rates unchanged at the September 16-17 meeting.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 09/04/2015 - 10:08 | 6508908 Dr. Engali
Dr. Engali's picture

Soooo, rate hike in September...., got it.

Fri, 09/04/2015 - 10:09 | 6508918 centerline
centerline's picture

I'm tingling with excitement. 

Fri, 09/04/2015 - 10:11 | 6508928 VinceFostersGhost
VinceFostersGhost's picture

 

 

Hold on....let me find my shocked face.

https://www.youtube.com/watch?v=srw3RdiIlrQ

 

Fri, 09/04/2015 - 10:17 | 6508970 mtl4
mtl4's picture

Geez thanks GS...............These are not the droids you're looking for, move along.

Fri, 09/04/2015 - 11:05 | 6509346 LawsofPhysics
LawsofPhysics's picture

GS and AIG and all their owners/managment should have been kicked to the fucking curb a long, long time ago...

there is no spoon.

Fine, no rules for you means no rules for me and my tribe either.  Fucking awesome!

 

Fri, 09/04/2015 - 12:16 | 6509544 Ham-bone
Ham-bone's picture

The real reason the Fed wants to raise rates has nothing to do with the economy or inflation...the reason has everything to do with IOER's...$2.5 trillion excess reserves held by the big banks.  The Fed's plan how they will effect higher rates?  Pay these banks billions more not to lend...not just a .25% but significantly higher.  And all the while, the Fed will continue repurchasing Treasury's and very well could engage in more QE!!!

...follow the money

http://econimica.blogspot.com/2015/08/rate-hikes-and-qesimultaneously.html

Fri, 09/04/2015 - 10:18 | 6508979 outlaw.guru
outlaw.guru's picture

That's Gartman, this is Goldman

Fri, 09/04/2015 - 10:20 | 6508994 Dr. Engali
Dr. Engali's picture

You think Goldman will tell the muppets what they really think, or I should say know? Do you follow any of their calls?

Fri, 09/04/2015 - 11:10 | 6509306 delete entry
delete entry's picture

my estimate. probably something like 90% of the time they are lying, 9% of time they make random guess, 1% of the time they are bragging.

Fri, 09/04/2015 - 12:44 | 6509704 mtl4
mtl4's picture

Gartman can be wrong all the time because he just sells newsletters, GS needs to confuse people in order to skim from the muppets......you can't do that if there's no doubt you always headfake predictively.

 

Hell I'd bet the GS marketing department is just full of stats on how often they need to tell the truth before lying on their big moves.

Fri, 09/04/2015 - 11:21 | 6509430 KnuckleDragger-X
KnuckleDragger-X's picture

Doc, depends on what "great deal" GS is pushing ths week......

Fri, 09/04/2015 - 12:44 | 6509825 ThroxxOfVron
ThroxxOfVron's picture

6% interest rate or higher within the next ten years.

-.6% interest rate or lower within the next ten years.

Fri, 09/04/2015 - 10:24 | 6509029 Redneck Hippy
Redneck Hippy's picture

The Fed should raise rates just to show their independence from Goldman.

If, in fact, they are independent of Goldman.

Fri, 09/04/2015 - 10:37 | 6509132 Muppet
Muppet's picture

Goldman makes money.  The FED makes money.   Only difference is what is meant by "makes".    One prints and other hoards. 

Fri, 09/04/2015 - 10:40 | 6509151 Dr. Engali
Dr. Engali's picture

That's not money that they are printing and hoarding.

Fri, 09/04/2015 - 11:06 | 6509356 LawsofPhysics
LawsofPhysics's picture

it is "money" only so long as producers actually accept it in exchange...

tick tock motherfuckers...

Fri, 09/04/2015 - 11:29 | 6509481 Cycle
Cycle's picture

The Fed is the provincial field office of GS...

Fri, 09/04/2015 - 10:23 | 6509024 Bay Area Guy
Bay Area Guy's picture

Doc, my thoughts exactly.  If Goldman says no, the answer is yes.

Fri, 09/04/2015 - 10:30 | 6509080 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Ramp fest today

No ramp fest today

Fri, 09/04/2015 - 11:54 | 6509616 RopeADope
RopeADope's picture

Your order of ramp fest will now be served.

Fri, 09/04/2015 - 10:32 | 6509098 Big Beta Bill
Big Beta Bill's picture

If the Fed raised rates they would actually CAUSE deflation. 

Fri, 09/04/2015 - 10:42 | 6509172 Dr. Engali
Dr. Engali's picture

We have been deflating for some time now.

Fri, 09/04/2015 - 11:30 | 6509485 LawsofPhysics
LawsofPhysics's picture

That's a good sheep.  With 7+ billion people on this rock deflation in anything required for a decent standard of living is a fucking myth.

Deflation in unecessary plastic crap and useless toys, sure. 

Fri, 09/04/2015 - 12:42 | 6509854 ThroxxOfVron
ThroxxOfVron's picture

Deposits paid before derivatives 

Derivatives paid before deposits 

 

How long will the FDIC take to pay one/the other based on prioritization?

Fri, 09/04/2015 - 11:02 | 6509328 indygo55
indygo55's picture

If they just do both, raise rates AND start QE4 (as if they already havent done that through the reverse repo) then they covered their bases. Its coming down folks. No two ways about it. Its only a matter of who gets out of Dodge first.  

Fri, 09/04/2015 - 10:10 | 6508920 Seasmoke
Seasmoke's picture

Of course. It's all a big farce. Why anyone still believes in it is beyond me. You have had 7 years to wake up and realize there is no spoon

Fri, 09/04/2015 - 10:20 | 6508993 metastar
metastar's picture

Unless you're born with a silver spoon in mouth.

Fri, 09/04/2015 - 12:43 | 6509860 ThroxxOfVron
ThroxxOfVron's picture

Gun in the hand beats any flavor of spoon.

Fri, 09/04/2015 - 10:13 | 6508943 RopeADope
RopeADope's picture

The FED cannot raise rates before the election.

Fri, 09/04/2015 - 10:15 | 6508955 Billy Sol Estes
Billy Sol Estes's picture

Anyone who mentioned previously about ending the FED will not be allowed near the election, before the elections.

Fri, 09/04/2015 - 10:20 | 6508995 RopeADope
RopeADope's picture

The FED can still get unforeseen consequences in the political arena if they destabilize the markets before the election. Consequences they will not risk as the credibility payoff would be marginal at best.

Fri, 09/04/2015 - 10:22 | 6509007 nickels
nickels's picture

-but, the current crash offers the best window of plausible deniability the the Fed will get to raise 1/4 point without obvious linkage to their actions....

Fri, 09/04/2015 - 10:14 | 6508947 adonisdemilo
adonisdemilo's picture

The only way they will raise rates in September, or any other month, is if they're stupid enough to believe their own lying data/propaganda.

I think it's fairly well known by now that the numbers of everything are manufactured to wrong foot everybody who "isn't in the club"

Fri, 09/04/2015 - 10:49 | 6509217 BeerMe
BeerMe's picture

It depends on what they are trying to do.  Meaning they put their best interests first, not the American citizen.

Fri, 09/04/2015 - 10:22 | 6508966 Grandad Grumps
Grandad Grumps's picture

I recall reading that Jack Welch said that in hindsight he never thought "he should have waited longer to fire someone"... or something to that effect.

The walk of a thousand miles starts with a single step. (Lao Tzu, I think)

If you know it has to get started sometime, then regardless of how difficult it will be, there really is no point in delaying.

Coordinating rate normalization with UN Agenda 2030 is probably as good a timing as any.

These are expected problems when you leave the ruling of the world to a relatively small group of covetous, greedy, insensitive, technologically advanced parasites. You get crap management.

Fri, 09/04/2015 - 10:17 | 6508973 outlaw.guru
outlaw.guru's picture

What Goldman wants, Goldman gets.

Fri, 09/04/2015 - 10:18 | 6508981 Baronneke
Baronneke's picture

"as Goldman's Jan Hatzius explains, they continue to "expect" the FOMC to keep policy rates unchanged at the September 16-17 meeting"  must be:

 

as Goldman's Jan Hatzius explains, they continue to "instruct" the FOMC to keep policy rates unchanged at the September 16-17 meeting.

Fri, 09/04/2015 - 10:21 | 6509002 RawPawg
RawPawg's picture

they will lift it in Sept if only to just get this whole mess over it,and them move on

looking forward to opening yet another can of spam(yum)..

 

Fri, 09/04/2015 - 10:23 | 6509023 Depression is Coming
Depression is Coming's picture

This is all noise. Goldman and JPM have had rate hike in December for last 3 months. When we get to November I am sure GS and JPM will have rate hike sometime in March...even with QE4. Not sure why this doofus at GS wastes time with this analysis. CIB and PWM divisions are operating based on Dec rate rise. This has absolutely nothing to do with jobs.

Fri, 09/04/2015 - 10:24 | 6509031 xrxs
xrxs's picture

Free advice from Goldman?  Translation: "See you on the other side of the trade, Muppets."

Fri, 09/04/2015 - 10:24 | 6509035 SSRI Junkie
SSRI Junkie's picture

there's a 100% probability that rates will stay the same, rise or fall sometime in the future

Fri, 09/04/2015 - 10:26 | 6509052 valley chick
valley chick's picture

Oddly I find this to be for entertainment purposes. This house of cards will come down either way very soon. You couldn't pay me to go long into this holiday weekend.

Fri, 09/04/2015 - 10:28 | 6509059 devo
devo's picture

Isn't no rate hike ever already priced in??

Fri, 09/04/2015 - 10:29 | 6509067 Stainmaker
Stainmaker's picture

FED is floating trial balloons from the hind ends of Fischer & Lacker to see how markets will react.  Looking for a bloodbath at the close.

Fri, 09/04/2015 - 10:29 | 6509070 trueFacts
trueFacts's picture

Only point: 

Must buy time to unwind long equity positions and enter short positions, ... must buy time to unwind bad bond positions.

Fri, 09/04/2015 - 10:32 | 6509091 nakki
nakki's picture

I still think a .125% rate hike (whenever they hike) followed closely by QE 4,5,6.

Fri, 09/04/2015 - 10:40 | 6509150 vq1
vq1's picture

"raise rates because of strong wage numbers"

"dont raise rates because of weak employment numbers"

decision to made by rock paper scissors. 

Fri, 09/04/2015 - 10:53 | 6509256 spekulatn
spekulatn's picture

Trade accordingly, bitchez. <wink><wink>

Fri, 09/04/2015 - 10:55 | 6509274 Not if_ But When
Not if_ But When's picture

How about a .00001% hike just so they can say they did it and get it the F*CK over with!

Fri, 09/04/2015 - 11:05 | 6509349 RopeADope
RopeADope's picture

Probably because it has something to do with the adage:

"Better to remain silent and be thought a fool than to speak out and remove all doubt."

or in the FED's case;

Better to stand pat and be thought a fool than to act and remove all doubt.

Fri, 09/04/2015 - 11:43 | 6509554 World citizen
World citizen's picture

Even IF there comes a rate hike at .25%... so what? Greenspan might be old and spent, but he is right saying it is baffling that an event like that could be anything material for the markets. 

The importance of monetary policy decisions is far smaller that what it used to be. If we want to look at something that really matters, we have China, Brasil, Russia and Europe, all with their unendless string of quirks and variou degrees of stupidity. And the list is far from complete.

This "historical" payroll news and its supposed major consequences have barely moved the markets. Old news already... 

Monday China re-opens and the US is on holidays... Let's see what happens then

 

Fri, 09/04/2015 - 11:51 | 6509599 Batman11
Batman11's picture

"China, Brasil, Russia and Europe, all with their unendless string of quirks and variou degrees of stupidity."

But on the stupdity stakes the US beat them all in 2008.

Wall Street was the source of the ongoing financial crisis.

James Rickards in Currency Wars gives some figures for the loss magnification of complex financial instruments/derivatives in 2008.

Losses from sub-prime - less than $300 billion
With derivative amplification - over $6 trillion

"It’s nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" (pg 404, “All the Presidents Bankers”, Nomi Prins)

Fri, 09/04/2015 - 12:27 | 6509773 World citizen
World citizen's picture

True, true... but when the US bank sharks created those toxic assets, the whole world rushed to buy them...

Of all things, stupidity is probably the most universal and common feature of mankind

Fri, 09/04/2015 - 12:06 | 6509672 HardlyZero
HardlyZero's picture
High VIX, no hike? What market history tells us

Will the recent spate of market volatility make the Federal Reserve less willing to raise rates? It's a case made by many market participants, and it appears to be somewhat supported by 20 years of market data.

Going back to August 1995, the central bank has never raised its target on the key federal funds rate while the CBOE Volatility Index has been as elevated as it is now.

http://www.cnbc.com/2015/09/03/high-vix-no-hike-what-market-history-tell...

Fri, 09/04/2015 - 12:40 | 6509786 TheRideNeverEnds
TheRideNeverEnds's picture

Rates have been declining steadily for thirty fucking years now, no shit they wont rise in September, they have to STOP GOING DOWN FIRST BEFORE THEY CAN GO UP YOU CUNTS!

God dammit I feel like rick santelli

The 30y printed rates at the beginning of this year lower than those at the bottom in 2008/9 and currently the 10y is trading at the same level as in 2008/9; that should tell you all you need to know.

Rates will not rise meaningfully in our lifetime. How do I know? Because its impossible for rates to rise. It is literally impossible. The financial system would implode. Rates are going to stay at zero maybe go even below zero and they are going to stay there unless and until the whole system burns to the ground.

That said, I remain short bonds cause fuck me I aint buying em here. Go ahead and raise those rates Yellen, I dare you....

Fri, 09/04/2015 - 13:36 | 6510122 morongobill
morongobill's picture

There it is Janet. From God's mouth. Now make it happen.

Fri, 09/04/2015 - 18:44 | 6511562 Midnight Rider
Midnight Rider's picture

It goes from God to Goldman to Janet to the cleaners.

Sat, 09/05/2015 - 07:05 | 6512706 Baronneke
Baronneke's picture

When there would be a 0.25% hike, what would this mean for interest payment on the US debt ??  And what about those companys who borrowed for share-buybacks ?

Do NOT follow this link or you will be banned from the site!