Lower than expected job creation in the US lifts hopes for 'soft landing'
Today’s US jobs data has lifted hopes that the country's economy could achieve a soft landing.
According to figures released by the Bureau of Labor Statistics today (4 August), 187,000 jobs were added last month, lower than the consensus of 200,000 and a fall from 209,000 in June. This was also the lowest gain since December 2020.
The unemployment rate came in at 3.5%, marginally higher than the multi-decade low of 3.4% seen in April and a slight decrease from 3.6% in June. Average hourly earnings rose 0.4% in the month, against 0.4% in June, while the annualised figure was unchanged at 4.4%.
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«It is unlikely we will see a notable tick up in the unemployment rate until job creation slows further or the participation rate increases, boosting the overall size of the labour pool,» said Nathaniel Casey, investment strategist at Evelyn Partners.
According to Neil Birrell, chief investment officer at Premier Miton Investors, the labour market does seem to be cooling, albeit slowly, «which is just what the Fed will want to see».
«Overall, this increases the chances of rates being at their peak and the Fed pulling off the trick of getting inflation under control whilst keeping the economy strong,» he said.
Today's US jobs data has lifted hopes that the country's economy could achieve a soft landing. David Henry, investment manager at Quilter Cheviot, argued while rate rises are having some impact, there seems to be enough momentum in the economy to avoid recession.
US interest rates hit highest levels in 22 years
«Whisper it, but the fabled ‘soft landing' may just be achieved, although a lot can still happen before the Fed declares 'job done',» he said.
«The economy's
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