Will Poor Jobs Data Delay A Rate Hike?

After the Federal Reserve decided to keep interest rates unchanged in September, many analysts shifted their projections for a rate hike to October.

The general consensus is that the bank will increase interest rates before the end of the year. With the number of opportunities to do so running out, many believe that October could be the month.

However, recent economic data has been soft, something that could push the bank's rate hike plans further back.

Weak Jobs Data

On Friday, U.S. non-farm payrolls data showed only a 142,000 increase in September, a significant departure from the 203,000 that had been forecast.

This could be a big factor in the Fed's decision to raise rates, as Bank Chair Janet Yellen has been adamant that rates will be largely dependent on improvements in the job market.

Over the weekend, Boston Fed President Eric Rosengren commented that his confidence in the economy's ability to withstand a rate hike had diminished in light of the weak jobs data, suggesting that the bank may hold off for at least another month and wait for more data.

Services Survey

On Monday, the Institute for Supply Management's non-manufacturing survey for September is due to be released. The figure is expected to fall in line with a trend of strong readings that began in July.

However, the same survey for manufacturers was released on Thursday with dismal results. The reading was just 50.2, barely over the 50-point mark that indicates expansion. The non-manufacturing result will be a key indicator of the U.S. economy's direction; if it meets the 57.7 reading that has been forecast, it could support a rate hike decision.