Home›Forex›Central Banks›US jobs weaken, boosting hopes for less Fed tightening

US jobs weaken, boosting hopes for less Fed tightening

The report showed a 23,000-job decline in July, with prior results revised down by 103,000, while hourly earnings rose just 0.1% and headline CPI increased 0.1% month over month.

Reported · Written up by our desk · Central Banks

Action Forex examined the latest US labor data and said it points to slower growth potential, with July recording a surprise decline of 23,000 jobs and a downward revision of 103,000 jobs to prior figures. The unemployment rate fell to 4.1% in July despite declining employment, which the outlet described as consistent with labor market stagnation.

The analysis linked the softer jobs picture to a broader lack of wage and inflation pressure, noting that average hourly earnings grew only 0.1% in July. It also highlighted inflation prints that matched expectations, including headline CPI up 0.1% month over month and 0.2% excluding food and energy, while annual headline inflation remained at 3.4%.

Action Forex said the July data does not argue for the Fed to postpone or drop rate hikes by itself, because it expects job growth constraints to be driven by supply conditions rather than policy being too tight. Still, it said the chances of a September rate hike have declined, while December remains the expected timing, with CPI and labor market data for August due before the September meeting.

Beyond rates, the outlet noted oil prices rose about $4 per barrel during the week, with elevated spreads between crude and refined products like gasoline and diesel amid mixed signals on the Strait of Hormuz. It also pointed to preliminary August PMIs as the next key release, especially for the euro area, due Friday.

Latest closeWTI crude $81.19 ▼2.5%|Gasoline (RBOB) $2.850 ▼9.6%

More like this

Sources