Unemployment fell in August for the first time since March, ticking down to 4.2% as the U.S. economy added 142,000 nonfarm payroll jobs, according to Bureau of Labor Statistics (BLS) data released Friday.
Economists anticipated that the country would add 161,000 nonfarm payroll jobs in August compared to the 114,000 added in initial estimates for July, and that the unemployment rate would fall to 4.2%, according to MarketWatch. The job gains follow a disappointing July report and a downward revision of over 800,000 jobs that the Biden administration had claimed to create between April 2023 and March 2024. (RELATED: One In Three Jobs Biden Admin Announced Over Course Of A Year Didn’t Actually Exist, Revisions Show)
Meanwhile, previously reported job gains for July were revised down from 114,000 to 89,000 while gains for June were lowered from 179,000 too 118,000.
Summary of Upcoming Job Report, Weekly Jobless Claims, and Implications for Federal Reserve Policy
• 📊 Expected job growth: ~161,000 in August (up from 114,000 in July)
• 📉 Projected unemployment rate: 4.2% (slight decrease)
• 📊 4-week moving average of jobless claims:… pic.twitter.com/Y2o3I37UVk— Mandeep Bhullar (@mbhullar) September 5, 2024
Inflation measured 2.9% year-over-year in July, well above the Federal Reserve’s target of 2%. To combat elevated inflation, the Fed kept its target federal funds rate in a range of 5.25% and 5.50% at its July Federal Market Open Committee (FOMC) meeting, the eighth straight meeting where it left the rate unchanged.
The FOMC is expected to lower its target rate in September, with Chairman Jerome Powell remarking that “the time has come for policy to adjust” during a speech at the Federal Reserve Bank of Kansas City’s Jackson Hole Symposium in August. Fifty-nine percent of interest rate traders predict a 0.25% cut and 41% of traders predict a 0.5% cut, according to the CME Group’s FedWatch Tool.
A reduction in the Fed’s target federal funds rate would lower the cost of borrowing for businesses and consumers, which could help increase hiring as companies gain access to greater amounts of capital.
Inflation has increased prices by more than 20% since President Joe Biden took office in January 2021. The combination of high inflation and high interest rates has pushed many Americans into insolvency, with delinquent credit card balances reaching a 12-year high in the first quarter of 2024, according to the Federal Reserve Bank of Philadelphia.
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