Investing.com – A better-than-expected reading Wednesday from the ADP report on July private sector payrolls, along with an upward revision to the prior month’s numbers, caused traders to slightly increase the odds for a rate hike from the Federal Reserve (Fed), although expectations remained for there to be no change from the current 0.25%-0.50% until well into 2017.
The chances for an increase in September edged up to 18% after the release, compared to the prior reading of 12%, according to CME Group’s FedWatch tool.
Odds for a December hike rose to 41.5%, from just 38.5% before the report.
Even so, markets were not expecting an increase until June 2017 with a probability of 53.6%.
Perhaps the real test will come with the official government numbers set for release on Friday.
The consensus forecast is that the data will show jobs growth of 180,000, the unemployment rate is expected to drop back to 4.8%, from the prior 4.9%, while average hourly earnings are estimated to rise 0.2% after gaining 0.1% a month earlier.