Weakest jobs growth in six months raises hopes for H2 interest rate cuts.
03 May 2024
Friday’s US non-farm jobs report reflected the smallest gain in employment we have seen in the US for a while now. Advancing only 175,000, against expectations of 238,000, is a bit of a miss in economic terms and, coupled with this, the overall unemployment rate ticked up to 3.9% when it was expected to hold steady at 3.8%. Average hourly earnings only advanced 0.2% versus 0.3% forecast, and this will be welcome news to the Federal Reserve (Fed).
In fact, the overall jobs picture will be erring on the side of dovish for the Fed, that is if one month’s reading can have that much prognostic significance. Either way an apparent cooling in the employment picture is what the Fed believes will help in transmitting to lower inflation prints and their eventual start point in cutting rates. Markets are reacting positively as a result.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.