Steve Kaminski’s Post

The blockbuster report bolsters the view that the economy is on track for a "soft landing," a scenario in which the Federal Reserve wrestles down inflation without triggering a recession. But the resilient labor market could prompt the Fed to push interest rate cuts to later in the year to ensure inflation is subdued before acting, economists say. https://lnkd.in/gFPPf-M5

Check out this story from USA TODAY: Where the economy stands as the Fed readies interest rate decision Monthly job growth surprised economists who expected thousands fewer jobs. Here's how that could impact the Fed's interest rate decision this week. https://lnkd.in/g49PacK7

The latest jobs report will lead the Fed to hold interest rates higher for longer. Recent reports have even shown inflation above the Fed’s 2% target. If you’re the Fed, you’re saying, “Hey, you know, we’re not at 2%, progress to 2% seems to be pretty slow now, so there’s no need for me to cut from that aspect. And, wow, look at what the economy just did on the growth side.” So the economy doesn’t need stimulus, I’m in no hurry to cut — so we’re thinking it’s going to be more like July before the Fed starts to cut Read more from Washington Examiner: https://lnkd.in/e7JU35ZT

𝐅𝐞𝐝 𝐥𝐢𝐤𝐞𝐥𝐲 𝐭𝐨 𝐜𝐮𝐭 𝐛𝐲 𝟓𝟎 𝐛𝐩𝐬: 𝐖𝐚𝐥𝐥 𝐒𝐭𝐫𝐞𝐞𝐭 The U.S. economy reported an increase of 142,000 new jobs in August, falling short of the anticipated 160,000 jobs. In response, analysts from Citi have expressed concerns regarding the latest jobs report - https://lnkd.in/duRaEgzT They highlighted that the below-consensus figure of 142,000 new jobs, coupled with the downward revisions for previous months and an almost static unemployment rate, did not meet expectations for a recovery from the July slowdown. "The figures line up with other signals that the job market is continuing to soften, a classic sign that the US economy is headed into a recession," Citi economists said in a note. "The report is not definitive for the size of the September rate cut – our base case is for 50bp. "[W]e are increasingly convinced the Fed will deliver multiple larger-sized cuts as the job market continues to cool." Vital Knolwedge's analysts said that "this release alone more than justifies the Fed going 50bp on 9/18." Elsewhere, Federal Reserve Governor Christopher Waller said today that the current economic data warrants action, suggesting that the Federal Reserve is fully prepared to cut rates. “Today’s job report continues the longer-term pattern of a softening of the labor market that is consistent with moderate growth in economic activity,” he said. “While the labor market has clearly cooled, based on the evidence I see, I do not believe the economy is in recession or necessarily headed for one soon,” Waller added. "The time may come for the Fed to act forcefully and quickly to cut interest rates, but it will be based on the data “and not on any pre-conceived notion of how and when the FOMC should act,” Waller said. For more on Waller, see here -> https://lnkd.in/dkhFbb55

At first glance, the magnitude of the difference between the report of jobs added and consensus was a bit shocking, At the same time, the increase in unemployment was also bigger than expected, triggering renewed fear of recession, notes Melissa Brown, Managing Director of Investment Decision Research at SimCorp. "Overall, however, the unemployment rate is still at an average level, and we've seen a lower magnitude of monthly jobs created in the past year without triggering recession fears. The next inflation reports will be important to see if wage growth, slightly lower than expected in today's report, has kept up. And for those who believe this month's report was a signal that a recession is nigh, I would remind them that the yield curve, another powerful signal, has been inverted for a couple years. Perhaps the dislocations from the Covid crisis have rendered some reliable signals less reliable in the current economy,” Melissa tells Kiplinger's Dan Burrows. https://lnkd.in/dmzhMsiR

The latest jobs report revealed higher unemployment and fewer jobs added in July, raising doubts about the economy's soft landing. The Federal Reserve, which recently held interest rates steady, is under pressure to cut rates to avoid a recession. Economists argue the Fed might have waited too long to ease monetary policy. Despite this, the labor market remains relatively strong, and the US isn't in a recession yet. The Fed's next move, likely in September, will depend on upcoming economic data. For more details, read the full article [here](https://lnkd.in/gY7YuMNJ).

As we enter September, we’ve had a lot of news and incoming data come in with implications for the trajectory of the economy going forward. Perhaps the most significant has been the apparent signals by members of the Federal Reserve that they are expecting to begin cutting rates potentially as early as their meeting later this month. This transition in monetary policy comes amidst the backdrop of incoming data that suggests continued progress on inflation and some further weakening in the labor market. While last month’s turbulence in the market appears to be isolated, many will be closely tracking the extent to which the labor market continues to weaken and if that leads to a more systematic slowdown. So as we enter the last month of the third quarter, there is a lot of interest in projecting where the economy is headed. The latest release of the Brave-Butters-Kelley Indexes (BBKI) has the coincident indicator at -0.5 for July, declining slightly from our revised estimate for June of -0.4: https://buff.ly/3R8hpIb This reading suggests the economy hovered the last two months below trend, which our model estimates to be near 2.8%. This read in part reflects the modest decrease in payroll employment growth, an uptick in the unemployment rate, and a modest decrease in housing starts in July. As was the case last month, a read like this from the BBKI suggests a slowing of the economy but one that is still not far from trend. With the recent progress on inflation, the next few months are likely to be a critical moment for the economy and ultimately will determine if the end of the inflationary cycle comes with the desired soft landing. #economicindicators #economicoutlook #bigdata #bigdataanalytics #economicgrowth #inflation #interestrates #federalreserve

The US economy grew at a 3% annualized pace in the second quarter, a faster pace than Wall Street had expected. The Bureau of Economic Analysis's third estimate of second quarter US gross domestic product (GDP) was unchanged from the second estimate which had shown 3% annualized growth. Economists had estimated the reading to show annualized growth of 2.9%. The third estimate for second quarter GDP confirms that economic growth was higher than the 1.4% annualized growth seen in the first quarter. Separately, data from the U.S. Department of Labor released Thursday showed 218,000 unemployment claims were filed in the week ending Sept. 21, below Wall Street's expectations for 223,000. This marked the lowest level of weekly claims since the middle of May. The data releases come a week after the Federal Reserve Board cut interest by half a percentage point in an effort to preserve what Fed Chair Powell described as an economy in "good shape." "[The economy is] growing at a solid pace. Inflation is coming down," Powell said on Sept. 18 after the rate cut decision. "The labor market is in a strong place. We want to keep it there. That's what we're doing [by cutting interest rates]." More: https://lnkd.in/eNb6fhA2 #yahoofinance #finance #economy #money #GDP #labor #growth #wallstreet #markets #investing

April's Economic Update: The latest jobs report from April 2024 indicates a solid increase in employment with 175,000 new jobs added. Although this demonstrates a healthy job market, the unemployment rate has experienced a slight uptick to 3.9%. Here's a quick breakdown of April's key economic indicators: 1. Jobs Added: 175,000 — A positive sign for job seekers and the economy. However, job growth was slower than expected. 2. Unemployment Rate: 3.9% — Up from 3.8% in March, indicating a relatively tight labor market. 3. Average Hourly Earnings: Increased by $0.07. The overall average for private employees is $34.75 — showing a modest rise from last month's $34.68, suggesting gradual wage growth. 4. Inflation: It’s important to note that while the job market shows resilience, inflation continues to be a significant concern. The Consumer Price Index (CPI) for March 2024 rose by 3.5% year-over-year, which remains above the Federal Reserve’s target of 2%. This suggests ongoing challenges in the economic landscape regarding purchasing power and cost of living adjustments. The Federal Reserve (Fed) may consider cutting interest rates if the CPI decreases consistently over the coming months What are your thoughts on these developments? How do you see them impacting your sector or personal finances? For more details visit: https://lnkd.in/gW5mHh4a #jobsreport #economy #inflation

The Weekly Perspective | National Economic Update: Steady Growth, Moderating Inflation, and Muted Job Gains Will the soft landing be achieved? The U.S. #economy grew at an annual rate of 2.8% in the third quarter of 2024, boosted by hefty #consumer spending (+3.7%) and government expenditure (+9.7%). This growth marked a sustained period of economic strength despite higher borrowing costs. #GDP was down 20 basis points quarter-over-quarter and 160 basis points below the Q3 2023 level and is projected to continue to moderate in the 1.7% to 2.0% range over the next 12 months. #Inflation showed signs of easing, with the personal consumption expenditures price index dropping to a 1.5% annual rate, suggesting the Fed’s recent aggressive interest rate policy may be impacting price stability. But consumers are still struggling with cumulative inflation of 20+% since 2021. Looking forward, anticipated #interestrate cuts could support further growth and potentially invigorate the slowing investment market. The national #unemployment rate stayed steady at 4.1% last month, however, just 12,000 jobs were added during the month following a September gain of 223,000, wildly missing the economists’ expectations of 100,000. Though much of this muted job growth could be due to two massive hurricanes during the month, the trend of slower job growth was already well underway up to September. It seems like much investment activity and business' decision-making has been put on hold for much of this election year. Then, we enter the holiday season after this. So early 2025 we will at least have some clarity, as firms ramp up for the year ahead. All things considered, the economy is on pretty stable ground despite inflation and muted private sector growth. But we are not out of the woods yet.