The S&P 500 nearly hit a record high as the jobs data lands

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• Friday, July 5, 2024 1:59 PM GMT+1

  The pressure on the central bank to act increases

  There’s no doubt what the story will be coming out of Friday’s jobs report — the risk of the Federal Reserve ending up behind the curve.

  As many believe it was too slow to raise interest rates in 2022, the Fed may cut rates too late.

  With the jobless rate currently at its highest level since November 2021, other data such as a persistent increase in jobless claims and a drop in job openings are starting to look like sending a clear signal that the headline job gains have overstated its strength. Labor market.

  Inflation data continued to slowly move towards the central bank’s 2% target, although that progress stalled in the first few months of the year.

  A key feature of this policy regime is the Powell Fed’s sensitivity to inflation data ahead of its target after a 40-year rise in inflation, which we see in 2022. But the labor market is starting to speak loud and clear: things are challenging for more workers.

  Neil Dutta at Renaissance Macro, who has become a leading voice on Wall Street saying the Fed should be more bullish on these rate cuts, wrote in a note minutes after Friday’s report was dropped, “Today’s employment report should confirm expectations. September’s rate cut shows economic conditions are cooling, and This differentiates the central bank’s business

  In Dutta’s view, the central bank’s July meeting should set the schedule for a September cut.

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  Friday, July 5, 2024 at 1:54 PM GMT+1

  Job gains are slowing, but the unemployment rate is set to hit its highest level since 2021

  The U.S. labor market added more jobs than expected in June, while the unemployment rate rose unexpectedly, with the job market continuing to cool after November 2021.

  Data from Bureau of Labor Statistics A U.S. economic report released Friday added 206,000 nonfarm payroll jobs in June, more than the 190,000 expected by economists.

  The unemployment rate rose to 4.1%, up from 4% in the previous month and the highest reading in nearly three years. June’s job additions saw a slight decline from May, which slowed Friday’s job gains to 218,000 from 272,000.

  Stock futures rose following the report, adding to gains after the market traded earlier this week amid softer-than-expected economic data, including gauges of inflation that suggested the U.S. was moving back toward an “inflationary path.” According to Federal Reserve Chairman Jerome Powell.