By T. Jayani, JadeTimes News
US job growth slowed last month, but the economy still outperformed expectations, according to official data. Employers added 206,000 jobs in June, while the revised figure for May was 218,000, down from the previously estimated 272,000. The unemployment rate inched up to 4.1%, and wage growth hit its lowest pace in three years.
Analysts suggest these numbers might prompt the Federal Reserve to consider rate cuts later this year, as the figures align with forecasts predicting 190,000 new jobs in June. Emily Bowerstock Hill, CEO of Bowerstock Capital Partners, described the data as "relatively benign," noting that it neither alarms markets nor concerns the Fed. She highlighted that the Fed is likely to implement one rate cut this year.
In June, US interest rates remained at 5.25%-5.5%, a range maintained since July last year. The minutes from the latest Federal Reserve meeting, released on Wednesday, indicated a slowing economy and diminishing price pressures. Financial markets currently estimate a 72% probability of a rate cut at the Fed's September meeting, with a rising chance of a second cut in December.
However, the Fed abandoned its March forecast of a three quarter point rate cut this year, which would have started in the summer and continued through the lead up to the US presidential election on November 5. In June, due to persistent price increases and strong job market figures, the Fed adjusted its outlook to a single quarter point cut this year.
While central banks globally often follow the Fed's lead on rate cuts, Bank of England Governor Andrew Bailey stated in May that "there is no law that the Fed has to go first."
