U.S. Jobs Market Cools Down: Is a September Rate Cut Coming?

On July 5, 2024, we got some big news about the U.S. job market that might mean lower interest rates soon. The latest jobs report shows that job growth is slowing down, which could lead to the Federal Reserve cutting rates in September.

The June report showed 206,000 new jobs, a bit more than expected, but with big downward revisions for the past two months. This means there were 111,000 fewer jobs added than we thought. The three-month average job growth is now the weakest since January 2021. The unemployment rate went up to 4.1%, higher than last year’s 3.4%, which means more people are looking for jobs. This cooling job market is also slowing down wage growth. Average hourly earnings only grew by 0.3% from last month and 3.9% from last year, the slowest since early 2021.

Most of the new jobs were in government and private education/healthcare services. Other sectors like leisure and hospitality, retail, and manufacturing saw job losses. Private payrolls only grew by 136,000 instead of the expected 160,000.

The Federal Reserve is likely pleased with this report because it shows the economy is cooling down without crashing. This cooling means that wages aren’t rising too fast, which helps keep inflation under control. If the core CPI comes in as expected next week, we could see a rate cut in September. Some experts think we might get three rate cuts this year, bringing the rate down to 4% by next summer.

Comments

The US Dollar's Dominance Explained (comprehensive)

The World's Favorite Currency The US dollar is the closest thing the world has to a global currency. It is the preferred choice for most international transactions and is held as a reserve currency by many countries, whether friendly or hostile to the US. The dominance of the dollar began in earnest after World War II when the US emerged as a global superpower. Investors trust the dollar and US assets, such as US Treasuries, because they are seen as safe places to store wealth in both good times and bad. This trust is underpinned by the strength and stability of the US economy and its laws. Why Is the Dollar So Dominant? 1. It’s Big The size of the US economy is a primary reason for the dollar's dominance. The US economy is massive, almost as large as the economies of China, Japan, and Germany combined. This economic heft is supported by the largest and most liquid capital markets in the world. US stock markets, home to many of the world's wealthiest and most innovative com...

5 SGX Stocks with Dividend Yield Higher than 5.4%

5 Singapore Stocks with High Dividend Yields: Get Steady Income! If you enjoy getting a steady stream of extra cash, then dividend stocks are for you! These are companies that pay you part of their profits just for holding their shares. However, not all dividend stocks are created equal. Some offer higher dividend yields, making them more attractive. Let's take a look at five Singapore stocks that offer attractive dividend yields of 5.4% or more. 1. PropNex Ltd (SGX: OYY) PropNex is a big name in real estate, offering services like real estate brokerage, training, and consultancy. As of February 2024, they had 12,233 sales professionals helping people buy and sell homes. Even though 2023 was tough for PropNex, with revenue falling 18.6% to S$838.1 million and net profit dropping 23.3% to S$47.8 million, they still managed to generate S$57.5 million in free cash flow. They also declared a final dividend of S$0.035, bringing the total dividend for 2023 to S$0.06. This gives PropNex ...

Microsoft, Apple and Nvidia Race to $4 trillion Market Cap: What You Need to Know?

Imagine if three of your favorite sports teams were all racing toward a major championship, each with a unique game plan. This is what's happening right now in the world of technology. Microsoft, Apple, and Nvidia are like those top teams, each striving to become the first company to reach a staggering $4 trillion market value. Let's dive into how each of these tech giants is making its move and what this means for you as an investor. Microsoft: Bringing AI to the Office Think of Microsoft as the experienced team captain, using its deep knowledge to stay ahead. Known for its popular software like Windows and Office, Microsoft is now pushing into artificial intelligence (AI) in a big way. They’ve introduced a tool called Copilot, which is like having a smart assistant in your computer that helps you work more efficiently. By integrating AI into everyday business applications, Microsoft aims to make businesses run smoother and more profitably. Imagine having a tool at your job th...

Underdog Investors

Search This Blog