Bloomberg writes that the forecasts were for around 165,000 new jobs. At the same time, the July figure has been sharply adjusted down to 89,000 new jobs.
The unemployment rate is 4.2 per cent, which is in line with expectations. In July, it stood at 4.3 percent.
The figures support the impression that the labor market is cooling down somewhat, after the June figures have also been adjusted down from 179,000 jobs to 118,000.
This probably gives the US central bank the push to begin cutting interest rates from the current interest rate level. The policy rate is now in the range of 5.25-5.5 per cent, the highest in 23 years.
Federal Reserve Chairman Jerome Powell said in a speech in August that the bank appeared to succeed in bringing inflation down to its target of 2 percent from a peak of 9.1 percent in 2022 without creating a recession, and that the bank does not want to see further weakening of the labor market.
– Overall, this is slightly weaker than expected, but not so weak that it is heading for a double interest rate cut later in the month. These job figures mean that the Fed will probably settle for a single cut at the upcoming interest rate meeting, says chief economist Kyrre M. Knudsen at Sparebank 1 SR-Bank.
He adds that the labor market has become even more important for interest rate setting after inflation in the US economy seems to have calmed down.
– Therefore simply “the world’s most important number” has become even more important, he says.
#Weaker #job #figures #expected
2024-09-07 00:09:12
What factors contributed to the decline in the unemployment rate to 4.2% despite slowing job growth in August?
Table of Contents
US Labor Market Update: Unemployment Rate Falls to 4.2%, Job Growth Slows
The latest jobs report has revealed a mixed bag for the US labor market. According to recent data, the unemployment rate has fallen to 4.2%, in line with expectations, while job growth has slowed down with only 142,000 new jobs added in August [[1]]. This figure is significantly lower than the forecasted 165,000 new jobs, and the July figure has been adjusted down to 89,000 new jobs, sparking concerns about a cooling labor market.
The unemployment rate, which stood at 4.3% in July, has now dropped to 4.2%, a welcome sign for the economy. However, this downward trend is not consistent across all reports. According to Trading Economics, the unemployment rate in the United States rose to 4.1% in June 2024, the highest since November 2021 [[2]]. This discrepancy highlights the complexity of the labor market and the need for careful analysis of multiple data sources.
The slowdown in job growth is a departure from the robust labor market seen in previous months. The June figures have also been revised downward from 179,000 jobs to 118,000, adding to concerns about a cooling labor market. This trend may give the US central bank the impetus to begin cutting interest rates from the current level of 5.25-5.5%, the highest in 23 years.
Federal Reserve Chairman Jerome Powell has stated that the bank appears to have succeeded in bringing inflation down to its target of 2% without creating a recession, and that the bank does not want to see further weakening of the labor market [[3]]. This sentiment is crucial in understanding the central bank’s approach to monetary policy and its impact on the labor market.
Despite the slowing job growth, there are still signs of resilience in the labor market. Weekly jobless claims have fallen 5,000 to 227,000, and continuing claims have dropped, indicating that layoffs remain low [[3]]. This data suggests that while job growth may be slowing, the labor market is not yet experiencing a significant downturn.
the latest labor market update paints a nuanced picture of the US economy. While the unemployment rate has fallen, job growth has slowed, and interest rates may be due for a cut. As the Federal Reserve navigates the complex landscape of monetary policy, it is essential to monitor labor market trends and adjust policy accordingly to ensure a stable and growing economy.
Keywords: US labor market, unemployment rate, job growth, interest rates, Federal Reserve, Jerome Powell, monetary policy, economy.
US Labor Market Update: Unemployment Rate Falls to 4.2%, Job Growth Slows
The latest jobs report has revealed a mixed bag for the US labor market. According to recent data, the unemployment rate has fallen to 4.2%, in line with expectations, while job growth has slowed down with only 142,000 new jobs added in August [[1]]. This figure is significantly lower than the forecasted 165,000 new jobs, and the July figure has been adjusted down to 89,000 new jobs, sparking concerns about a cooling labor market.
The unemployment rate, which stood at 4.3% in July, has now dropped to 4.2%, a welcome sign for the economy. However, this downward trend is not consistent across all reports. According to Trading Economics, the unemployment rate in the United States rose to 4.1% in June 2024, the highest since November 2021 [[2]]. This discrepancy highlights the complexity of the labor market and the need for careful analysis of multiple data sources.
The slowdown in job growth is a departure from the robust labor market seen in previous months. The June figures have also been revised downward from 179,000 jobs to 118,000, adding to concerns about a cooling labor market. This trend may give the US central bank the impetus to begin cutting interest rates from the current level of 5.25-5.5%, the highest in 23 years.
Federal Reserve Chairman Jerome Powell has stated that the bank appears to have succeeded in bringing inflation down to its target of 2% without creating a recession, and that the bank does not want to see further weakening of the labor market [[3]]. This sentiment is crucial in understanding the central bank’s approach to monetary policy and its impact on the labor market.
Despite the slowing job growth, there are still signs of resilience in the labor market. Weekly jobless claims have fallen 5,000 to 227,000, and continuing claims have dropped, indicating that layoffs remain low [[3]]. This data suggests that while job growth may be slowing, the labor market is not yet experiencing a significant downturn.
The latest labor market update paints a nuanced picture of the US economy. While the unemployment rate has fallen, job growth has slowed, and interest rates may be due for a cut. As the Federal Reserve navigates the complexities of the labor market, it is essential to consider multiple data sources and expert analysis to understand the implications of these trends on the economy.
The labor force participation rate, which measures the proportion of the population that is either employed or actively looking for work, has averaged 62.84% from 1948 to 2024, reaching an all-time high of 67.30% in January 2000 [[2]]. This metric provides additional context to the labor market, highlighting the complexity of the factors at play.
the latest labor market update presents a mixed picture, with a decline in the unemployment rate accompanied by slowing job growth. As the Federal Reserve considers its next move on interest rates, it is crucial to carefully analyze the data and expert opinions to ensure a balanced approach that supports the economy.
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