Friday's episode ended with the first indicators of how the economy fared in August, and it was quite positive, but that wasn't the end of the story. On Friday afternoon, US non-farm payroll data was released and it had consequences. The expectation was that they created 300,000 new jobs in August, and it turned out to be 315,000. This means that the American economy is still running hot and that there is a greater chance that the Federal Reserve Bank will raise their policy interest rate again at the end of the month. In His Jackson Hole speech, Jerome Powell made it clear that they will act aggressively to bring inflation under control. For us here in South Africa, this, unfortunately, means a weaker rand-dollar exchange rate, a more volatile stock market, and finally also an increase in the repo rate.
* The Economics Minute is supported by the NWU Business School.
