Wall Street investors prepared for Friday’s employment report (5.9.25) received three elements that only reinforced the view of a cool job market, keeping live interest rates bets alive. Fed and leading to falling the odds of bonder .
The latest data on recruitment and unemployment benefits are preceded by what economists expect to mark the weakest period of growth in the US by the pandemic. As US government bonds increased, money markets almost completely discounted a Fed move in September and at least two reductions in 2025. The shares rose.
“Even the most skeptical of relaxation of measures will have to admit the growing risks of labor market inability,” said FHN Financial’s Will Compernolle. “If this dynamic continues in the coming months, companies will soon be fired faster than they will hire, to a negative increase in jobs.”
Applications for unemployment benefits in the US have increased to the highest level than June. Payrolls in the private sector increased by 54,000, according to ADP Research data, which are different from estimates. Recruitment plans have been reduced to the lowest level ever recorded for August, according to Outplacement Challenger, Gray & Christmas.
Employers in the US showed little enthusiasm for hiring workers during August and the unemployment rate was probably launched at an almost four -year high.
Economists predict that approximately 75,000 jobs were added, based on Bloomberg’s average research, while the unemployment rate is projected to 4.3%. Four months of payroll increase below 100,000 would mark the weakest period since the start of the pandemic in 2020.
“Federal bank free access to the labor market has expired,” said Jamie Cox of Harris Financial Group. “You can expect that the Fed will overturn the balance of risks to reduce interest rates in September.”
Tomorrow’s employment report will be the decisive factor, but so far this week data confirm a slowdown in the labor market, according to Chris Larkin at Morgan Stanley’s E*Trade.
“In the short term, markets can adopt this data because they should increase the chance of reducing interest rates by the Fed,” he said. “But if the data gets too worse, they could raise concerns about the health of the economy.”