Hiring Bounced Back In August, But Not Enough To Erase Fears Of Weakening Job Market
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Key TakeawaysThe U.S. economy added 142,000 jobs in August, rebounding from July's dismal job growth of 89,000 but falling short of forecasts of 161,000.Meanwhile, the unemployment rate fell to 4.2%, potentially easing recession fears.Financial markets are pricing in higher odds that the Federal Reserve would react to the cooling job market by making a large interest rate cut in September.
Hiring bounced back in August after a dismal July, but fell short of expectations, potentially putting more pressure on the Federal Reserve to make a super-sized interest rate cut later this month.The U.S. economy added 142,000 jobs in August, up from 89,000 in July, and the unemployment rate fell to 4.2% from 4.3%, the Department of Labor said Friday. Friday’s report also showed July’s job market was even worse than previously thought, with the bureau downwardly revising its job growth figures by 25,000.August job growth was slower than the 161,000 that forecasters expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Still, it showed the job market bouncing back after a surprising slump in July.Weather Isn't Only Thing Cooling the Job MarketThe level of job growth indicated that while July’s downturn may have been partly caused by bad weather, the market may still be on a worrisome trajectory. "The job market is clearly cooling, leaving less and less margin for error," Daniel Zhao, lead economist at job site Glassdoor, posted on social media platform X.With the job market still cooling, investors think the Federal Reserve is more likely to cut the key fed funds rate by half a point at the next meeting rather than a less aggressive quarter-point cut. The odds of a jumbo rate cut rose as high as 59% after the report, according to the CME Group’s FedWatch tool, which forecasts rate cut movements based on fed funds futures trading data. Read the original article on Investopedia.
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