US Non-Farm Pay Rolls Data Sparks Worries Over Interest Rate Hike In US

Business

oi-Sunil

By Sunil Fernandes

Published: Saturday, September 5, 2015, 7:36 [IST]

US non-farm payrolls data came in weaker than expected at 173,000, but, analyst are split whether there would be an interest rate hike by the US Fed at its Sept 16-17 meeting.

The consensus estimates was for a 223,000 figure, but despite that other data such as wage increase and a fall in unemployment raised the prospect of an interest rate hike.

A drop in the employment and an increase in wages might lead the US Fed to hike interest rates. The US Dow Jones ended the day sharply lower on Friday and was down almost 3 per cent for the week.

European markets also dropped following the US nonfarm payrolls data. The German DAX and French CAC saw cuts of almost 2.5 per cent.

Analysts are not sure as to what could be the outcome of the US Fed meeting, but, the way markets have reacted suggest that investors could be looking at a US Fed interest rate hike for the first time in many years.

Asian markets have also reacted with the Indian markets falling to a 13 month low and facing the worst week for the markets in the last 4 years.

Foreign Portfolio Investors (FPIs) have been constantly selling in the Indian markets, while domestic institutions have been buyers.

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