The June jobs report revealed a healthy increase of 206,000 jobs, but also suggested a significant cooling in the labor market. “This is a very good jobs report if you're hoping the Fed will start cutting rates,” said Greg McBride of Bankrate.com. June job gains beat expectations but were down from May. The unemployment rate rose to 4.1%, the first time it's reached that level since 2021. Wage growth was at a three-year low. “This is really consistent with the Fed's ability to cut rates as soon as September, as long as inflation remains cooperative,” McBride said. Inflation has come down significantly from its peak, but remains higher than the Fed's target rate. The central bank released its semi-annual policy report on Friday and said it needs more confidence that inflation continues to fall before it starts cutting rates. “On the inflation front, housing costs were really the only problem area,” McBride said. Without housing costs, inflation would have stayed below the Fed's 2% target. “Frankly, one of our biggest challenges going forward, and has been, is how to increase the supply of affordable housing,” said Jared Bernstein, chairman of the White House Council of Economic Advisers.More information on the direction of interest rates could emerge next week when Federal Reserve Chairman Jerome Powell testifies before the House and Senate.
The June employment report revealed a gain of 206,000 jobs, but also signaled a significant cooling in the labor market.
“This is a very good jobs report if you're hoping the Fed will start cutting interest rates,” said Greg McBride of Bankrate.com.
Employment gains in June exceeded expectations but were down from May.
The unemployment rate rose to 4.1%, the first time it has reached that level since 2021.
Wage growth was the slowest in three years.
“This is right in line with the Fed's ability to cut rates as early as September if inflation is cooperative,” McBride said.
Inflation has fallen significantly from its peak but remains higher than the Federal Reserve's target rate.
The central bank released its semi-annual policy report on Friday and said it needed more confidence that inflation was continuing to fall before it started cutting interest rates.
“Housing costs are really the only problem area in terms of inflation,” McBride said.
Without housing costs, inflation would have been below the Federal Reserve's 2% target.
“Frankly, one of the biggest components of our challenge, both in the past and going forward, is increasing the supply of affordable housing,” said Jared Bernstein, chairman of the White House Council of Economic Advisers.
More information on the direction of interest rates could emerge next week when Federal Reserve Chairman Jerome Powell testifies before the House and Senate.