Hey there, economy watchers! 🌐 The U.S. job scene just threw us a curveball. In July, the unemployment rate edged up to 4.3%, the highest since October 2021. 😮 What's going on?
Turns out, the U.S. added only 114,000 non-farm jobs last month, way below the 185,000 jobs economists were expecting. That's even less than the 179,000 jobs added in June. 📊 This slowdown has some experts thinking it's time for the Federal Reserve to cut interest rates.
Barry Bosworth, an economist at the Brookings Institution, said the weak job report \"strengthened the case for a near-term rate reduction.\" 🏦 Desmond Lachman from the American Enterprise Institute agreed, saying it's \"difficult to understand\" why the Fed hasn't already started cutting rates. He warns that waiting too long might increase the chances of an economic recession. 🔮
Dean Baker from the Center for Economic and Policy Research chimed in, predicting that \"barring some big surprises,\" the Fed will likely cut rates in September. The big question is whether it'll be by 0.25 or 0.50 percentage points. 🤔
All this comes after Fed Chair Jerome Powell said the labor market was undergoing \"ongoing, gradual normalization.\" He hinted that the Fed would wait to see more data before making any moves. 🕰️
Meanwhile, markets took a nosedive after more people filed for jobless benefits than expected. 📉 Investors are worried that the Fed could be waiting too long to start trimming rates.
With the presidential elections just a few months away, a rising unemployment rate isn't great news for the current administration. \"It's not clear whether this is a one-month development or the start of a new trend,\" said Darrell West from the Brookings Institution. 🎢
Stay tuned, folks! The economic rollercoaster is far from over. 🎢
Reference(s):
U.S. unemployment rate ticks up, strengthening case for rate cut
cgtn.com
