- More Fed officials express concern about labor market
- Fresh data underscores job market risks cited by Fed dissenters
- Heavy data docket looms ahead of September 16-17 Fed meeting
Aug 8 (Reuters) – Since the Federal Reserve’s decision last month to hold interest rates steady, a shift appears underway at the U.S. central bank, with several Fed officials sounding increasingly uneasy about the labor market and signaling their openness to, if not impatience for, a rate cut as soon as September.
Their evolving stance may please President Donald Trump, who has pushed aggressively for lower interest rates all year. The reasons for it, including new data indicating a weakening labor market that Trump has claimed is “rigged,” may not.
Labor market worries were at the heart of arguments put forward by Fed Governor Christopher Waller and Vice Chair Michelle Bowman when they dissented from the Fed’s July 30 decision to leave short-term borrowing costs in the 4.25%-4.50% range, where they have been since December. The 9-2 majority signed off on a statement that characterized labor market conditions as solid.
Days later, they looked far less so.
“Concerning” was how Fed Governor Lisa Cook earlier this week described revisions to the government estimates that slashed job gains in May and June to what economists see as recession levels. The same report also showed employers added far fewer jobs than expected in July, and a tick up in the unemployment rate to 4.2%.