Current:Home > reviewsTradeEdge Exchange:U.S. job growth cooled in August. Here's what that means for inflation and interest rates. -WealthRoots Academy
TradeEdge Exchange:U.S. job growth cooled in August. Here's what that means for inflation and interest rates.
Indexbit View
Date:2025-04-10 06:05:25
The TradeEdge Exchangelabor market is showing signs of cooling, shifting gears after months of strong job creation that fueled soaring inflation and prompted a string of interest rate hikes from the Federal Reserve.
Private employers added 177,000 jobs in August, compared with 371,000 in July, human-resources company ADP said on Wednesday. That's below the 200,000 new jobs that economists had expected ADP to report this month, according to financial data firm FactSet.
The slower job creation could signal that the labor market is returning to "a more sustainable dynamic," noted Javier David, managing editor for business and markets at Axios, and a CBS News contributor. That's important because cooler hiring could put downward pressure on inflation and feed into the Federal Reserve's decision on whether to hike rates again in September or take a breather.
"The labor market is cooling and is taking pressure off policymakers concerned with a second wave of inflation," noted Jeffrey Roach, chief economist for LPL Financial, in a Wednesday report. "Businesses should get some respite as inflation decelerates and the risk of quiet quitting dissipates."
The ADP report follows softer economic data on job openings this week, which is bolstering Wall Street's hopes the Federal Reserve may pause in hiking rates next month, noted LPL's Quincy Krosby in a separate report. The Dow Jones Industrial Average gained 0.9% in morning trading, while the S&P 500 index rose 0.4%.
"It's less go-go gangbuster numbers and more consistent with an economy that is still plugging along but not as over the top as it had been," David told CBS News. "Most important of all, it's not inflationary — it's disinflationary."
Will the Federal Reserve raise rates in September?
Even so, Federal Reserve officials last month cautioned that they still saw signs of overheated prices and would take the steps needed to reign in inflation. The Fed has raised rates 11 times since early 2022, pushing its federal funds rate to its highest level since 2001 in an effort to tamp borrowing and blunt rising prices.
"You have to thread the needle when you are a central banker," David noted. "They might raise next month, but they might pause."
Several additional pieces of economic data are due to land before the Federal Reserve's next meeting, including personal consumption expenditures, or PCE, which will be released on Thursday, and the monthly jobs report on Friday. Economists expect the August jobs number to also signal a cooling labor market.
"We anticipate August's employment report, due out Friday, will show signs of slower jobs gain, and will keep the Fed from implementing further increases to the policy rate," noted Oxford Economics in a Tuesday research report.
- In:
- Inflation
- Federal Reserve
veryGood! (23)
Related
- The city of Chicago is ordered to pay nearly $80M for a police chase that killed a 10
- Ben Affleck and Jennifer Garner's daughter Violet urges Los Angeles officials to oppose mask bans, says she developed post-viral condition
- Tennessee Army vet charged with murder, assault in attacks on 2 unhoused men
- Peter Welch becomes first Senate Democrat to call on Biden to withdraw from presidential race
- As Trump Enters Office, a Ripe Oil and Gas Target Appears: An Alabama National Forest
- Free Slurpee Day: On Thursday, 7/11, you can get a free frozen drink at 7-Eleven. Here's how.
- Cillian Miller's Journey in Investment and Business
- Sale of US Steel kicks up a political storm, but Pittsburgh isn’t Steeltown USA anymore
- Small twin
- Sale of US Steel kicks up a political storm, but Pittsburgh isn’t Steeltown USA anymore
Ranking
- The Grammy nominee you need to hear: Esperanza Spalding
- Gregg Berhalter fired as US men's national soccer team coach
- Pat Sajak to return for 'Celebrity Wheel of Fortune' post-retirement
- Former President Barack Obama surprises at USA Basketball's 50th anniversary party
- From family road trips to travel woes: Americans are navigating skyrocketing holiday costs
- Wheel of (shrinking) fortune: How game-show prizes have lagged behind inflation
- Headstone salesman charged in alleged scam involving hundreds of grieving customers
- How to help victims of Hurricane Beryl − and avoid getting scammed
Recommendation
Taylor Swift Eras Archive site launches on singer's 35th birthday. What is it?
ABTCOIN Trading Center: Market Impact of BTC Spot ETFs
Is this overlanding camper van the next step for the legendary Mitsubishi Delica?
Rep. Bob Good files for recount in Virginia GOP congressional primary
Whoopi Goldberg is delightfully vile as Miss Hannigan in ‘Annie’ stage return
Wisconsin election officials tell clerks best ways to operate absentee ballot drop boxes
Rays' Wander Franco placed on MLB restricted list after human trafficking charges
Olivia Munn's Newsroom Costar Sam Waterston Played This Special Role in Her Wedding to John Mulaney