Nick Timiraos "US job slowdown evident… Fed likely to cut 25bp in September"

As the U.S. labor market sharply slowed this summer, analysts said the U.S. central bank, the Federal Reserve (Fed), is now more likely to implement a 25bp (0.25 percentage point) rate cut at the September FOMC meeting. However, uncertainty about the pace of subsequent rate cuts has increased.

On the 5th, Nick Timiraos, a Wall Street Journal (WSJ) reporter who is regarded as the Fed's unofficial spokesman, wrote on X (formerly Twitter), "This slowdown in employment will make it easier for Fed officials to decide on a 25bp cut at the meeting two weeks from now," but added, "Discussions about the pace of subsequent cuts have become more complicated."

He said, "Employment turned negative in June, ending a 53-month run of job growth." He explained, "It was the second-longest expansion in history, but it fell short of the 113-month consecutive record that ended with the COVID-19 pandemic."

Timiraos pointed out, "Private-sector employment averaged an increase of just 29,000 per month over June–August," adding, "This is the lowest level since the pandemic." He added, "The six-month average gain in private-sector employment also slowed to 67,000."