Employers Unexpectedly Cut 23,000 Jobs, Raising Hopes for Easier Rate Policy
Markets priced in less than a 50% chance of a September Federal Reserve hike after U.S. employers cut 23,000 jobs and payroll revisions deepened the slowdown.
- On Friday, the Labor Department reported that U.S. employers unexpectedly shed 23,000 jobs in July, with downward revisions shaving 103,000 positions from May and June payrolls.
- Traders reacted swiftly, cutting bets on Federal Reserve interest-rate hikes as odds of a September increase dropped to roughly 40% from 60% before the report.
- Yields on two-year U.S. Treasuries fell eight basis points to 4.16% on Friday; Tom di Galoma, managing director at Mischler Financial Group, said, "The headline number being negative is a total shock."
- Next week's Consumer Price Index data, due Aug. 12, will be key; Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, noted that inflation figures will likely be the deciding factor for the Fed.
- The Bank of America Institute offered contrasting analysis, suggesting payroll growth may have accelerated during July, attributed to increased job mobility boosting after-tax wage growth for lower-income households.
22 Articles
22 Articles
Employers unexpectedly cut 23,000 jobs, raising hopes for easier rate policy
Stocks are mostly rising in early trading on Wall Street and Treasury yields are falling after the government reported that employers unexpectedly cut 23,000 jobs last month. The S&P 500 rose 0.4% early Friday. The Dow Jones Industrial Average edged down 52 points, or 0.1%, and the Nasdaq compos...
'Grim' New jobs report a 'kick in the guts': economics expert
Economics and public policy professor Justin Wolfers called the Friday jobs report a big disappointment.Writing on social media, Wolfers, who teaches at the University of Michigan, explained, "That's a big kick in the guts. Payroll is much weaker, and the U.S. lost 23,000 jobs in March, well below expectations of plus-80,000. Huge downward revisions, too: May now plus-63,000 (instead of plus-129,000), June now plus-20,000 (down from plus-53,000)…
At around 1400 GMT, the Dow Jones was 0.14%, the Nasdaq index was up 0.73% and the expanded S&P 500 index was up 0.30%. "It was feared that a much stronger employment report would give the Fed additional reasons to raise its rates at its September meeting," comments AFP Sam Stovall of the CFRA firm. "However, today's figures, much weaker than expected, have ruled out this possibility," he says. In July, the U.S. labour market lost 23,000 jobs, w…
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