The latest employment data released by the U.S. Bureau of Labor Statistics last night (5th) showed that the number of non-farm employment in the United States increased by 206,000 in June. Although it was slightly higher than the market expectation of 190,000, it was far lower than the previous value of 272,000, and The unemployment rate rose to 4.1% in June, below estimates and the previous reading of 4%, and the highest since November 2021.
More importantly, the latest data revised down the non-farm payrolls in April and May by a total of 111,000, showing that the hot employment in the United States is continuing to slow down, adding confidence to the United States' path to combating inflation.
September interest rate cut expectations rise to 71.8%
Previous CPI, PCE and other data have shown that inflation has slowed down, and the release of non-agricultural data last night has once again boosted market expectations for the US Federal Reserve (Fed) to start cutting interest rates in September. According to Fedwatch data, the probability of an interest rate cut in September has increased from 57.9% at the end of last month to the current 71.8%, and the probability of keeping interest rates unchanged in September has dropped to 24.8%.
Is the U.S. economy facing a recession?
Although market expectations for the Fed to cut interest rates have risen again, due to the slowdown in the job market, some experts say that the risk of economic recession in the United States is rising. Wall Street reporter Nick Timiraos, known as the "Fed's mouthpiece," said this:
The U.S. unemployment rate rose to 4.05% in June from 3.96% in May. The data has increased by 0.22% since March.
Using Sahm's rule, the three-month average is 0.42 percentage points higher than the minimum value in the previous 12 months, and is getting closer to the 0.5 percentage point threshold.
