The American economy gained 114,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at a meager 24,000 jobs. The headline unemployment rate jumped up to 4.3%.
The number of unemployed workers increased by 352,000 in July while the number of employed workers went up by only 67,000. Average earnings declined at an annual rate of 0.8%.
This is a weak report. If it's not enough to spur the Fed into action, I don't know what is.
They’ll keep waiting. They want unemployment up to 5% so workers learn their place again.
Amusing how corporate America champions automation, then laments the loss of jobs.
They’ll keep waiting.
Pretty clearly they're going to cut next month. They should've done so this month.
It was pretty clear last month that they were going to cut this month, which is why the markets reacted poorly yesterday.
$10 says they don’t cut next month either.
It was pretty clear last month that they were going to cut this month
Not so. A lot of people were urging them to cut, sure. But that's a very different animal from the Fed itself indicating openness to a rate cut in a month's time, which it what happened on Wednesday. And, needless to say, the inflation doves now have an unambiguously poor employment report to point to, as well as easing by other central banks.
I'm not excusing their foot-dragging. They probably should have started easing in May or June. They absolutely should have done a cut this month at the latest. But if Powell were really the MAGA loon some people around here seem to hint at, why would he even say a cut is "on the table" in September? A more tenable gaslighting strategy would be to play up the dangers of inflation.
https://www.reuters.com/markets/us/fed-expected-hold-rates-steady-open-door-september-cut-2024-07-31/
The more legitimate complaint I suspect will be 25 vs. 50 basis points. I'd guess (strictly a guess) the latter is going to be warranted by next month, but they'll only do 25.
Serious question. Since the Fed met earlier this week and didn’t cut rates, do we have to wait a whole month more (until their next regular meeting) for any chance of a rate cut? Or could they see this report and swing into action with cuts next week in a special improvised meeting, say?
probably just long enough for the insiders (aka congress) to put in their sell short orders
FOMC does not hold special meetings. That would make it look like they were reacting to events, and we wouldn’t want them doing that, would we?
I'm sure they could meet. I'm sure they could do lots of things if they really wanted to. They probably want to appear cold and calculating instead of panicking.
The thing to remember about the Fed, they get criticized if there is inflation and if there is a recession. BUT, the individual members only lose reputation if there is inflation. No repercussions if there is a recession.
Even so, it is amazing they didn't lower rates. And by lower rates I mean lower them a measly quarter point, .25%
They don't have to wait for a meeting. They've done it before. I don't expect them to do so.
We had monthly jobs numbers worse than this in April and also once last year, so don't go jumping off the roof yet. In spite of Kevin's hysteria, new jobs are not zero. Yes, there's a slowdown, but it's not catastrophic. People are still spending.
There is no hysteria, but clearly the objective is to start lowering rates before we are in a recession. Waiting until new jobs are at zero is very, very bad for workers.
They could call a special meeting, but it's not usually done unless an emergency is recognized.
The September meeting is one of the four meetings per year at which committee members submit economic projections, and that might be something they wanted to wait for before letting the rate cuts roll. They don't issue projections at the end-of-July meeting.
Since the Fed met earlier this week and didn’t cut rates, do we have to wait a whole month more
They can ease monetary policy any time they like in response to events, and have done so regularly (1987, 2001, 2008, 2020) outside of FOMC meetings when there's sufficient need.
They won't be taking emergency action this time unless the markets get a lot uglier.
YES!!! They need to cut rates last year.
If it's not enough to spur the Fed into action, I don't know what is.
When Daddy Trump's return to the WH is certain.
Can you imagine if a Democratic president ever ranted and railed against the Fed the way Trump did, or tried to appoint some scruffy-bearded anarcho-socialist to the Board to blow shit up (remember the hacktackular rwnj Stephen Moore?)?
They would be running smelling salts by the tanker truck load down to the financial district and the NYT building just to deal with all the attacks of the vapors.
There are times when I wish Biden were able to take a move out of Trump's playbook to threaten or jawbone a particular industry or company into doing something he wanted -- like threaten to use anti-trust powers to break up the big grocery chains or sic armies of OSHA inspectors on processing plants unless they immediately lowered retail food prices by 20% or something. But of course if a Democrat did that, he would be instantly impeached or something and the country would be in flames.
Can you imagine if a Democratic president ever ranted and railed against the Fed the way Trump did...
Yes, I can imagine it. Democratic presidents should try this from time to time. I personally think Fed independence is a good idea, but that doesn't mean criticism from government officials is intrinsically illegitimate. Some times these guys screw up. They should hear about it!
A better solution to the inflation problem a couple of years ago would have been to keep interest rates low, but jack up taxes on high-income earners. Same effect (slowing economic growth/lowering inflation) while keeping durable goods, cars, homes, etc. affordable for average workers.
But that would require Republicans to pull their heads out of their asses, so it was a non-starter.
You can't tackle inflation by limiting tax increases to a tiny slice of the population. They don't consume enough. If you target the entire, say, top 40% of the income distribution, you'd get results, sure. But you'd also be including a lot of folks most of us wouldn't consider "high income earners."
Considering that the inflation was almost entirely a story of short term supply side disruption and that inflation resolved itself before high interest rates had time to slow demand......we probably could have 'solved' inflation with tax increases.
Maybe Intel’s layoff of 15,000 employees will help the Fed along,
Summers said we would need 7.5% unemployment to tame inflation, so, by god, we are going to hold interest rates high until we get two quarters of 7.5% unemployment!
Powell is still working hard to erase memories of his "firehose of cash" days, needs to re-establish cred as a respectable Fed chair. So he won't move until he's shown everybody he's not only going to kill inflation dead, but he's going to stomp that sucker flat, burn the remains, and spread the ashes in a salt mine. He wants to be forced to drink from the chalice, and only when it's obvious there's no rational choice.
As a lot of comments say, they should have started cutting a couple of meetings ago and have been telegraphing a probable cut in September. But after today Wall Street is howling for half a percent this time. If today was decision day, I'd put odds of that big a step at less than 50-50.
There will be one more jobs report before the next FOMC meeting (Sept. 17-18) and two more CPI releases (Aug. 14, Sept. 11).