The economy US labor market cools noticeably
The US labor market is weakening. The Federal Reserve will take a close look at the figures with a view to future monetary policy.
02.08.2024, 15:54
SDA
In the US, the previously robust labor market is showing increasing signs of weakness. In July, the world's largest economy created surprisingly few new jobs and unemployment reached its highest level for almost three years. According to the Department of Labor, the number of new jobs only rose by 114,000. Analysts had expected an average increase of 175,000. The unemployment rate rose by 0.2 percentage points to 4.3 percent. The rate was last higher in October 2021.
Recently, there had already been signs of a slowdown in the labor market. Job growth in the private sector was comparatively weak in July and weekly initial jobless claims reached their highest level in a year.
Figures important for the US Federal Reserve
Developments on the labor market also play an important role for monetary policy, as the Fed is aiming for a robust labor market in addition to price stability. The Fed recently left key interest rates unchanged in the range of 5.25 to 5.50 percent and thus at a comparatively high level.
Following the interest rate decision on Wednesday, however, the monetary authorities hinted at a first rate cut in September since the major wave of inflation and once again made it clear that further monetary policy decisions would depend on the development of economic data. In addition to the labor market, inflation in the USA has also weakened recently. In June, inflation fell to 3.0%, having previously stood at 3.3%. Inflation is thus approaching the Fed's target of two percent again.
