Only 22,000 jobs were added to the US economy in August, in another indication that the labor market has been affected, intensifying pressure to reduce the cost of borrowing abruptly.
Friday data from the Work Statistics Office was much lower than the up -to -date jobs added to 79,000 jobs added in July and the 75,000 that analysts were expected to poll.
The report is a blow to him, who has advertised his tax cuts and duties as a benefit for the world’s largest economy.
The US president strongly criticized the Fed and its head, Jay Powell, because they did not reduce interest rates so far this year, insisting that high borrowing costs are hurting consumers and businesses.
Blow to American bonds
The price of US bonds increased sharply after payroll announcement, as investors increased their bets that the Fed would soon start lowering interest rates after reductions of 1 percentage unit in 2024.
The yield on the two -year bond, which is sensitive to interest rates, fell 0.11 percentage points to 3.48%.
“The evidence shows that the labor market is slowing quite significantly, possibly more than the Fed expected at the beginning of the year,” said Gennadiy Goldberg, US US Strategy Strategy at TD Securities.
Investors are now betting that there is about a 10% chance of an extremely large reduction in the interest rate by half a percentage point at the Fed meeting later this month. Prior to employment data, future fulfillment markets provided for a 250 percentage of points.
For his part, Steve Englander, a global head of G10’s coins research on Standard Chartered, said that this number means that a striking interest rate reduction by half a percentage point would now be a “serious thought” for the Fed.
Increasing jobs in the US has been reduced on average to 27,000 from May to August, compared to 123,000 in the first four months of the year.
“The labor market is starting to freeze,” said KPMG’s Diane Swonk.
“It is never good to see recession and that was the first we saw since December 2020 at the climax of the Delta wave [του κορονοϊού]when the economy almost enters a double recession. “
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