Larry Summers says jobs report shows Fed's half-point rate cut was 'a mistake'
Acting Labor Secretary Julie Su breaks down the September jobs reports, jobs revisions, the losses in the manufacturing sector and collective bargaining as port workers reach a tentative deal.
Former U.S. Treasury Secretary Larry Summers says September's better-than-expected jobs report shows the Federal Reserve's half-point rate cut was «a mistake.»
Following the Labor Department's report that employers added 254,000 jobs in September – well above the 140,000 gain that was predicted by LSEG economists – and the unemployment rate declined slightly from a month ago to 4.1%, Summers took to social media to weigh in on the central bank's actions.
American economist and Harvard University Professor Lawrence H Summers during the interview at Taj Place on September 30, 2024, in New Delhi, India. (Raj K Raj/Hindustan Times via Getty Images / Getty Images)
«Today’s employment report confirms suspicions that we are in a high neutral rate environment where responsible monetary policy requires caution in rate cutting,» the famed economist wrote. «With the benefit of hindsight, the 50 basis point cut in September was a mistake, though not one of great consequence.»
PRIVATE SECTOR JOB GROWTH ROSE TO 143,000 IN SEPTEMBER, BEATING EXPECTATIONS: ADP
«With this data, ‘no landing’ as well as ‘hard landing’ is a risk the @federalreserve has to reckon with,» he continued. «Nominal wage growth remains well above pre-COVID levels and it does not appear to be decelerating.»
Analysts at The Kobeissi Letter noted that the latest jobs report beat expectations for the first time since May, and posed the question of whether the central bank's 50-basis point cut was too aggressive.
US ECONOMY ADDED 254K JOBS IN SEPTEMBER, WELL ABOVE EXPECTATIONS
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