Powell points to cooling labor market as sign rate cuts could be near

Powell points to cooling labor market as sign rate cuts could be near
Powell points to cooling labor market as sign rate cuts could be near

{“lang”:”es”,”firstPublishedAt”:”2024-07-10T03:13:25.000Z”}

He Federal Reserve Chairman Jerome Powellcommented that the US economy is currently facing a cooling labor market, while prices remain high.

Powell specifically stated that the labor market has “cooled down while remaining strong”However, the latest report on employment data shows that although hiring remained strong in June, the unemployment rate continued to rise (for the third consecutive month up to 4.1%).

Reduction of interest rates and financial risks

It’s a statement, the president of the FED He pointed out that some current economic factors could be the way to start with a interest rate cut. He also made clear in his semi-annual testimony before Congress that “it does not seem likely that the next policy move will be a rate hike (…) As we get further into inflation… we begin to loosen policy at the right time.”

Regarding financial risks, Powell noted that “high inflation is not the only risk we face” since, Cutting rates “too late or too little could unduly weaken economic activity and employment.” He added that economic growth has been moderating after a strong expansion in the second half of last year.

June data indicate a slowdown in job creation

The Labor Department’s report revealed that the unemployment rate in the country rose in June, reaching 4.1%, while job creation slowed compared to the previous month.

In total, according to the report compiled by AFP, 206,000 jobs were created in June compared to the 218,000 generated the previous month. Of these new jobs, One third are in government positions.

The unemployment rate was expected to remain stable at 4%. The Department’s report notes a slowdown in activity in the manufacturing and services sectors. Part-time jobs fell by about 49,000.

In that sense, CNN also explained that American wages are growing at the slowest pace in two years.

“Workers earned $35 an hour, on average, in June, 10 cents more than in May. Compared with a year earlier, average hourly earnings rose 3.9% in June,” the outlet reported.

 
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