June jobs report raises pressure on Fed for September rate cut
What did the June jobs report indicate about the US labor market?
The June jobs report indicated a mixed employment picture in the US labor market. While 206,000 jobs were added, surpassing economists' expectations, the unemployment rate rose to 4.1%, its highest level since November 2021. Additionally, job gains for April and May were revised down by a significant 111,000, and wage growth slowed to its lowest rate since June 2021. These factors suggest the labor market is cooling, which could lead to the Federal Reserve cutting interest rates as early as September.
How did the unemployment rate change according to the latest report?
The latest report shows that the unemployment rate has risen to its highest level since November 2021. The unemployment rate has increased by 0.36% from its 12-month low over the last three months, bringing into play a potential triggering of the Sahm Rule, which has preceded each of the last nine recessions in the US.
What is Neil Dutta's perspective on the Federal Reserve's rate-cut timing?
Neil Dutta, head of economics at Renaissance Macro, believes the Federal Reserve should begin its rate-cutting cycle in September. He argues that economic conditions are cooling, making the trade-offs different for the Fed. Dutta expects the June jobs report to firm up expectations for a September rate cut and sees the Fed's July meeting setting the stage for this move.