Nonfarm payrolls increased 114,000 last month and the jobless rate rose to 4.3 per cent, putting the Fed solidly on a path to cutting rates in September.
| US hiring slowed markedly in July and the unemployment rate rose to the highest level in nearly three years, suggesting a faster deterioration in the labour market than previously thought and putting the Federal Reserve solidly on a path to cutting interest rates in September.
Near midday in New York, the yield on the US 10-year note was 16 basis points lower to 3.82 per cent. It’s now 62 basis points lower over the last month.All three US equity benchmarks were 2 per cent lower. A plunge in key technology companies sent the Nasdaq 100 down 10 per cent from its peak, matching the definition of a “correction”. The VIX, or volatility index, surged to its highest since 2022.
“The cooling in the labour market is showing little sign of stabilising,” Bloomberg economists said in a note. “At the current pace, it will go beyond the ‘gradual normalisation’ Powell described after the July FOMC meeting. We expect the unemployment rate to continue rising, reaching 4.5 per cent by year end.”
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