WASHINGTON–The Federal Reserve will almost certainly cut rates when it meets later this month following release of a sluggish jobs report last week, according to numerous economic analysts and one credit union economist.
The U.S. added 22,000 jobs in August, the Labor Department reported, which is below the gains many had been forecasting.
The government also revised its numbers from earlier in the summer, and said that the economy lost a net 13,000 jobs in June. It was the first such decline since December 2020.
““August’s sluggish hiring numbers, combined with downward revisions to prior months, showed the economy added only about 30,000 jobs per month during the summer, with gains concentrated in just a few sectors. Low hiring and rising unemployment imply a decline in consumer spending and economic growth, which generally leads to reduced price pressures,” Dawit Kebede, senior economist with America’s Credit Unions, said in a statement. “With employment showing continued weakness and rates still in restrictive territory, the Federal Reserve is positioned to cut rates this month and likely deliver additional cuts before year-end to move policy toward neutral levels. With economic concerns, credit unions will be there to support members facing financial challenges and continue supporting their communities through affordable lending and strong financial management.”
The Labor Department said the unemployment rate, which is based on a separate survey from the jobs figures, was 4.3%, up slightly from 4.2% in July.
Healthcare Leads Way
Private-sector employment grew by 38,000 jobs, driven by a gain of 46,800 jobs in healthcare and social assistance. Federal government employment declined 15,000 jobs in August.
In addition, July’s figures were revised up by 6,000 to a gain of 79,000 for the month. June’s figures were revised from a gain of 14,000 to the 13,000 loss.
President Trump has been pressing the Fed to cut rates, and Fed Chairman Jerome Powell sent signals last month he was more receptive to a rate cut depending on economic data.
