The unemployment rate edged down to 4.1% from 4.2%, and the underemployment rate also saw a decrease to 7.5% from 7.7%. The labor force participation rate remained steady at 62.5%. In terms of wages, there was a negligible change, with year-over-year growth maintaining at 3.9%.
BCA Research indicated that these figures point to a persistently healthy labor market, albeit one that is on a cooling trajectory. The data aligns with the previous month’s Job Openings and Labor Turnover Survey (JOLTS) which showed both layoffs and hiring rates to be moderate.
The report’s findings have prompted a market response, with bond yields climbing and stock markets dipping, as expectations for the next Federal Reserve interest rate cut are now delayed until later in 2025.
Despite the positive labor market data, BCA Research suggests that it is improbable for the labor market to strengthen significantly due to the current tight financial conditions exerting pressure on the real economy. The firm advises investors to adopt a cautious approach, recommending a slight preference for government bonds and cash over assets considered to be overvalued.
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Source: Economy - investing.com
