The US Department of Labor today released its employment report for August, based on which investors assess the state of the federal economy and the direction of the Fed’s monetary policy.
The US unemployment rate was 4.2 percent, compared to 4.3 percent in July. Information service Bloomberg’s the median of forecasts collected from economists expected 4.2 percent.
Non-agricultural jobs grew by 142,000 in August. The corrected reading for July was 89,000. The forecast expected 165,000 jobs. Jobs are taken into account without agriculture due to the seasonal nature of the industry.
Jobs in industry decreased by 24,000. According to corrected figures, jobs grew by 6,000 in July. Economists expected a decline of 2,000 jobs.
The Ministry of Labor publishes its report on the first Friday of every month. The report is based on surveys of households and companies.
A soft landing in hopes
Many investment firms and private investors have been hoping that the US central bank, the Fed, would bring about a soft landing: to stop high inflation without the economy drifting into recession.
If the macroeconomic data is weak, this gives the Fed back to lower interest rates, which supports the economy. On the other hand, weak numbers can increase the fear that a recession will not be avoided.
The market has expected an interest rate cut of 0.25 percent, but the probabilities of a 0.50 percent rate cut have increased.
The Fed will decide on its key interest rate on September 18. Currently, the key interest rate is in the range of 5.25-5.50 percent.
Source: www.arvopaperi.fi
