Recent labor market figures have intensified concerns about the health of the US economy, reinforcing expectations that the Federal Reserve will move to lower borrowing costs. In August, the economy added just 22,000 jobs, a figure far below forecasts and signaling potential weakening in employment growth. n nThis underwhelming performance has led financial markets to anticipate a 25-basis-point reduction in interest rates during the Fed’s upcoming meeting on September 16-17. Furthermore, trading in interest rate futures suggests growing confidence that policymakers may implement a total of three rate cuts by the end of the year, up from earlier projections. n nThe data underscores mounting pressure on the central bank to support economic momentum amid signs of cooling demand and tightening labor conditions. n— news from Bloomberg.com
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Charting the Global Economy: Weak US Jobs Data to Prod Fed Rate Cuts
Disappointing employment data validated fears that the US labor market may be on the brink of a downturn and lifted expectations for how much the Federal Reserve will lower interest rates this year. n nAfter a paltry 22,000 jobs were added in August, investors fully priced in a quarter-point rate reduction at the Fed’s Sept. 16-17 policy meeting. Odds also edged up for a total of three rate cuts this year, according to futures contracts.