Nov Taper On Its Way As Clarida And Bostic Shrug Off Weak Jobs Report

Two FOMC members today emphasized that the weaker-than-expected September payrolls figure is not going to derail a Nov taper announcement.

• VC Clarida in a speech today: "Job gains as measured by the payroll survey have averaged 550,000 per month over the past three months. Labor market progress this year, as measured by the Kansas City Fed's Labor Market Conditions Indicators, has been notable, with this index of 24 labor market indicators since December 2020 closing two-thirds of its shortfall relative to its pre-pandemic level." (Note the first metric is correct, but incorporates a 1+mn job gain in July).
• Meanwhile, Atlanta Fed Pres Bostic said in an FT interview published today that the outlook was bright enough to taper, despite September's disappointing labor market report: demand for labor remains strong, and COVID cases appear to be peaking which may alleviate labor shortages.
• While Bostic has been hawkish relative to most of the FOMC, Clarida is in the center of the spectrum and a key member of Fed leadership. With both pointing to a November taper (and with no further jobs reports until after the November FOMC), the bar is set very high indeed at this point for the Fed to back off from an announcement next month.