With the Fed next scheduled to meet on interest rates on September 17-18, the sluggish labor market will increase speculation that an oversized rate cut of 50 basis points could be on the way.
Payroll employment rises by 142,000 in August; unemployment rate changes little at 4.2% https://t.co/ZwrVfLviqL #JobsReport #BLSdata
— BLS-Labor Statistics (@BLS_gov) September 6, 2024
The August figures confirmed that the US job market is slowing, according to Mortgage Bankers Association senior vice president and chief economist Mike Fratantoni. He said that while the unemployment rate had dipped, it would likely move higher in the coming 12 months – potentially to the 5% mark.
Still, Fratantoni isn’t convinced that a bigger cut than previously expected will arrive in September. “Federal Reserve officials have recently pivoted from a primary focus on inflation to a more balanced view,” he said, “with concerns about inflation and employment.
“This report highlights that such a pivot makes sense, and that a 25-basis-point cut at its September meeting is a sensible first step at this time.”
Average hourly wages increased by 3.8% compared to the same time last year, while wages for production and nonsupervisory employees were up by 4.1%.
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