US hiring misses estimates, unemployment dips slightly to 4.2% in August | Today News

The United States Department of Labor released employment data showing an addition of 142,000 jobs as the unemployment rate changed to 4.2 per cent in August 2024, according to the government economic data release on Friday, September 6.

US employment data’s July 2024 figure was lower at nearly 89,000 jobs, according to the government release. The data shows that the unemployment rate declined to 4.2 per cent, compared to 4.3 per cent in July, a move which can ease some policymakers‘ concerns, reported the news agency AFP.

The job data figures solidify the perceptions of a cooling labor market. Job gains in June are likely to go significantly downward, which is likely to give the US Federal Reserve (FED) a reason to start cutting rates from the current decade-high levels, according to the report. 

The US economy has “made significant progress on inflation, and now the Fed must secure this progress by lowering interest rates” at this month’s policy meeting, said Brendan Boyle, a top Democrat on the House Budget Committee, quoted the news agency.

Wall Street’s debate on FED rate cuts:

The agency also quoted economists stating the job market losing steam rather quickly which leaves a possibility for a larger rate cut.

“The large downward revision to payroll gains in the prior two months and the continued narrow concentration in payroll advances underscore that the labor market is losing steam rather quickly,” said Nationwide chief economist Kathy Bostjancic. “This leaves open the possibility of larger 50 basis points rate cuts in November and December,” she said, according to the report.

The average hourly earnings increased 0.4 per cent to $35.21, exceeding the expectations of August, said the Labor Department.

“With the economy now in equipoise and inflation on a path to 2%, it is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate,” said John Williams, president of Federal Reserve Bank of New York on Friday, quoted the news agency Bloomberg in a report.

Sonu Varghese, the global macro strategist at Carson Group, told the agency that the labor market is showing clear signs of softening, and the FED needs to step in to cut off the tail risks. The current data “seals the deal” for a September rate cut, but she still questions whether or not the FED will go big on this front, according to the report.