U.S. Employment Growth Slows, Fed Considers Rate Cut

According to BlockBeats, economists anticipate that the employment report set to be released on Friday evening will continue to show the weakest job growth in the U.S. since the pandemic began, potentially prompting the Federal Reserve to consider a rate cut. The median forecast from a survey of economists predicts an increase of 75,000 non-farm jobs in August, marking the fourth consecutive month of job growth below 100,000. The unemployment rate is expected to rise to 4.3%, the highest level since 2021. Recent months have seen a noticeable slowdown in U.S. job growth, as companies face concerns over demand, rising costs, and ongoing economic uncertainty stemming from U.S. President Donald Trump's unpredictable trade policies. This has led to a cooling of hiring activities, increasing pressure on Federal Reserve officials to intervene and support the slowing labor market. Stephen Stanley, Chief U.S. Economist at Santander US Capital Markets LLC, noted, "The labor market is essentially frozen, with companies in a wait-and-see mode until the situation becomes clearer." The employment report released on August 1 for July showed job growth significantly below previous reports, altering the perspectives of many economists and policymakers regarding the labor market. The substantial downward revision also led to Trump's abrupt dismissal of the Bureau of Labor Statistics director, raising concerns about the future integrity of U.S. data. As the labor market becomes increasingly fragile, Federal Reserve Chair Powell has expressed openness to a rate cut, with August's weak employment report further strengthening the case for such a move. Based on futures contract pricing, the market widely expects Federal Reserve officials to lower the benchmark rate by 25 basis points at their September 16-17 meeting. However, it remains unclear what actions the Fed will take in subsequent meetings.