JPMorgan sees nonfarm payrolls in goldilocks zone

Investing.com -- JPMorgan analysts said the economy is at full employment with inflation remaining elevated, following comments from Kevin Warsh at Jackson Hole.

The bank noted that two key data releases are scheduled before the Federal Reserve meeting on September 16: one nonfarm payrolls report and one Consumer Price Index reading. JPMorgan views the CPI data as more influential than the jobs report.

The current market environment operates under a dynamic where positive economic news could negatively affect stocks, according to the bank. A stronger-than-expected nonfarm payrolls number would likely push bond yields higher and weigh on equities. The reasoning is that increased employment leads to higher consumer spending, which encourages businesses to expand hiring further.

JPMorgan described this pattern as self-reinforcing, particularly given the loose financial conditions that Warsh highlighted at Jackson Hole.

The bank warned that a significant miss on the downside, such as another negative jobs print, could revive concerns about stagflation.

JPMorgan placed the ideal range for nonfarm payrolls between 30,000 and 70,000 jobs added.

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