Economy

Hiring slowed last month, a sign that the Federal Reserve’s inflation-fighting campaign is taking hold. But with rising wages and low unemployment, the labor market remains resilient.The U.S. labor market showed signs of continued cooling last month but extended a two-and-a-half-year streak of job growth, the Labor Department said Friday.U.S. employers added 209,000 jobs, seasonally adjusted, and the unemployment rate fell to 3.6 percent from 3.7 percent in May as joblessness remained near lows not seen in more than half a century.June was the 30th consecutive month of job growth, but the gain was down from a revised 306,000 in May and was the lowest since the streak began.Wages, as measured by average hourly earnings for workers, rose 0.4 percent from the previous month and 4.4 percent from June 2022. Those increases matched the May trend but exceeded expectations, a potential point of concern for Federal Reserve officials, who have tried to rein in wages and prices by ratcheting up interest rates.Still, the response to the report from economists, investors and labor market analysts was generally positive. The resilience of the job market has bolstered hopes that inflation can be brought under control while the economy continues to grow.The year-over-year gain in wages exceeded that of prices for the first time since 2021Year-over-year percentage change in earnings vs. inflation More

The message the world’s top central bankers delivered late last month could not have been clearer. Bank of England governor Andrew Bailey, and his US and eurozone counterparts Jay Powell and Christine Lagarde, all insisted that high inflation — and high interest rates — would endure. When it comes to the US and the eurozone, however, investors remain unconvinced that what’s proved to be the worst bout of inflation for a generation will linger for as long as rate-setters claim — despite a rise in yields this week. They still expect the Federal Reserve to cut borrowing costs starting late this year or early next, despite Powell’s bet — voiced at the European Central Bank’s flagship Sintra event — that price pressures would remain above his crucial 2 per cent goal beyond the end of 2024. The reversal of the rapid rate rises we’ve witnessed over the past year from the ECB may take a little longer. But market pricing is wildly out of sync with the musings of the eurozone’s rate-setters, too. Investors expect a further two quarter-point rate increases in the eurozone this year, followed by a pair of cuts over the course of 2024.In the UK, markets are shifting their expectations in the other direction. They now think the BoE will need to turn more hawkish, raising rates from their current level of 5 per cent to a peak of 6.5 per cent in March 2024, heaping more pain on the country’s mortgage-holders. Yet, even in Britain, where price pressures remain far more aggressive than in the US or Europe, there’s a glimmer of hope over a shift in how companies set prices. Many central banks, including the BoE, poll thousands of businesses each month to see how they set prices. Those surveys reveal costs have not only risen fast, but in frequent adjustments. The BoE’s Decision Maker Panel poll of chief financial officers at businesses shows that before inflation took off, almost half of firms would only set their prices once a year. That figure has now fallen to about a third. That’s intuitive. The supply chain bottlenecks that emerged during the pandemic — and were exacerbated by Russia’s invasion of Ukraine — have, along with higher energy costs, exposed companies to rapid price changes. Naturally, that has meant more frequent shifts in what they charge their customers.

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The change in frequency has been dramatic. According to the BoE’s Decision Maker Panel, more than a fifth of firms changed prices once a quarter last year — up from just over one in 10 in 2019. Alarmingly, almost 15 per cent changed prices once a month — compared with about 5 per cent in 2019. But how fast will companies cut them, now pressures are easing? There are some positive signs. A chart taken from a presentation at Sintra by Huw Pill, the BoE’s chief economist, showed those businesses that had reported shifting prices more frequently last year expected inflation to be lower in 2023. They expected to raise prices by an average of 5 per cent between now and next June. That compares with forecasts of almost 6 per cent from those companies that raise their prices annually. “There is no room for complacency about the risk of greater inflation persistence, given recent developments in services prices and wage growth,” Pill told us. “But this survey of firms’ pricing behaviour offers some evidence in the other direction.”Firms increasingly also have space to cut prices. After soaring last year, figures out this week showed eurozone manufacturers’ costs fell outright for the first time since 2020 in the year to May, on the back of the sharp fall in energy prices. In the UK, they rose just 0.5 per cent — down almost 24 percentage points from their summer 2022 high. In some areas, companies are responding by cutting consumer prices. US milk is one example. Over the course of 2022, the US Department of Agriculture recorded eight changes to the cost of a gallon of whole milk bought in a Washington DC store, gyrating from a low of $4.19 at the start of the year to a high of $5.04 in August 2022. After several falls since then, this year prices have already dropped three times — from $4.99 in January to $4.19 in June. More generally, US food inflation has slumped of late on the back of falls on international wholesale markets last year. There are nascent signs that European food prices will soon catch up.However, falls in prices might not be as dramatic as the drop in producers’ costs. Take diesel costs in the UK, which can change daily. A report by the Competition and Markets Authority showed that, when producers’ costs rose, retailers increased prices at the forecourt fast. When producers’ costs fell, they declined for consumers too — but at a far slower clip. The spread between retailers’ costs and the price customers pay was still well above historical levels as of May 2023, despite sharp falls in wholesale prices. The mixed picture explains why rate-setters both in the UK and elsewhere are so cautious in changing their message. After originally insisting that price pressures would prove shortlived, central bankers will not want to declare victory over inflation until the evidence is overwhelming. However, investors seeking inflation clues might want to keep a close eye on the clip at which everyday items become more [email protected] More

Federal Reserve policymakers are keenly focused on the strength of the labor market as they debate how much further the economy needs to cool to ensure that quick inflation fades back to a normal pace. Fresh labor market data released on Friday probably offered little to dissuade them from raising interest rates at their meeting this month.The June data is the last payrolls report that officials will receive before the central bank’s July 25-26 meeting. It underscored many of the labor market themes that have been present for months: Although job growth is gradually slowing, wage growth remains abnormally quick and the unemployment rate is very low at 3.6 percent.Investors widely expected the Fed to raise rates at their July meeting even before the report, and the June data reinforced that prediction. Many paid especially close attention to the pay data: Average hourly earnings climbed 4.4 percent over the year through June, versus an expectation for 4.2 percent, and wage gains for May were revised higher. After months of slowing, those earnings figures have held roughly steady since March.“On balance, it’s strong enough for the Fed to think they still have some more work to do,” said Michael Gapen, chief U.S. economist at Bank of America, explaining that the report contained both signs of early weakness and signs of sustained strength. “Hiring is cooling, but the labor market is still hot.”Fed officials are closely watching wage data, because they worry that if pay growth remains unusually rapid, it could make it difficult to bring elevated inflation fully back to their 2 percent goal. The logic? When companies compensate their workers better, they might also raise their prices to cover their higher wage bills. At the same time, families earning more will be more capable of shouldering higher prices.Fed officials have been surprised by the economy’s staying power 16 months into their push to slow it down by raising interest rates, which makes borrowing money more expensive and is meant to cool consumer and business demand. Growth is slower, but the housing market has begun to stabilize and the job market has remained abnormally strong with plentiful opportunities and at least some bargaining power for many workers.That resilience — along with the stubbornness of quick inflation, particularly for services — is why policymakers expect to continue raising interest rates, which they have already lifted above 5 percent for the first time in about 15 years. Officials have ratcheted up rates in smaller increments this year than last year, and they skipped a rate move at their June meeting for the first time in 11 gatherings. But several policymakers have been clear that even as the pace moderates, they still expect to raise interest rates further.“It can make sense to skip a meeting and move more gradually,” Lorie K. Logan, the president of the Federal Reserve Bank of Dallas, said during a speech this week, while noting that it is important for officials to follow up by continuing to lift rates.She added that “inflation and the labor market evolving more or less as expected wouldn’t really change the outlook.”Fed officials predicted in June that they would raise interest rates twice more this year — assuming they move in quarter-point increments — and that the labor market would soften, but only slightly. They saw the unemployment rate rising to 4.1 percent by the end of the year.Policymakers will not release new economic projections until September, but Wall Street will monitor how policymakers are reacting to economic developments to gauge whether another move this year is likely.“Jobs growth has slowed but remains too strong to justify an extended Fed pause,” said Seema Shah, chief global strategist at Principal Asset Management, explaining that the fresh data gave the Fed “little reason” to hold off on a July increase. The question is what happens after that.For now, investors see another rate increase after July as possible but not guaranteed, and the June jobs report did little to change that. The yield on the two-year Treasury bond, which is sensitive to changes in investors’ expectations for interest rates going forward, eased to around 4.9 percent, from over 5 percent. The move reflected in part investors’ relief that the jobs numbers had not followed a series of other data points this week that exceeded expectations.Some on Wall Street expect the economy to soften more substantially in the coming months, which could prod the Fed to hold off on future rate moves. It often takes months or years for higher borrowing costs to have their full economic effect, so more slowing could be in the pipeline already.This month, one of Wall Street’s widely watched recession indicators, which compares yields on short- and long-dated government bonds, sent its strongest signal since the early 1980s that a downturn is coming.But Fed officials aren’t so sure. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said on Friday on CNBC that getting inflation down without a recession would be a “triumph.”“That’s the golden path — and I feel like we’re on that golden path,” Mr. Goolsbee said. More

Today’s top storiesTreasury secretary Janet Yellen said the US and China should not let disputes over national security harm economic relations as she met Chinese premier Li Qiang on a visit to Beijing intended to stabilise fraught relations between the two countries.Twitter threatened to sue Meta, alleging it stole trade secrets for its rival “text-based conversation app” Threads, which launched this week with tens of millions of users signing up within hours. West coast editor Richard Waters says the real test for Meta will be whether it can adapt its new service quickly enough to out-run Twitter chief Elon Musk, finding new ways to engage an audience with ideas that are not a straight copy.The US will supply Ukraine with cluster munitions for the first time after president Joe Biden approved the move as part of a new military aid package, US officials familiar with the decision said on Friday. For up-to-the-minute news updates, visit our live blogGood evening.There was mixed news for the Federal Reserve today when new data showed US jobs growth slowed more than expected in June but wage growth and unemployment remained stubbornly high.The economy added 209,000 new non-farm posts, compared with a forecast of 225,000, the first time the report has fallen short of expectations in 15 months. Hourly wage growth however was up 4.4 per cent, well above the roughly 3.5 per cent rate that most economists think is consistent with the Fed’s 2 per cent inflation target, while the unemployment rate only edged down from 3.7 per cent to 3.6 per cent.

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Markets still expect the Fed to keep on increasing interest rates to get inflation down but overall reaction was much calmer than yesterday, when buoyant private sector jobs data sparked a global sell-off on stocks and bonds, driving US borrowing costs to their highest level since 2007. The minutes from the Fed’s last policy meeting, published on Wednesday, showed officials lining up behind additional rate rises in light of the still tight labour market and “upside risks” to inflation. The mood was reinforced by Fed policymaker Lorie Logan, who said yesterday that the “clearly pretty hot” recent data meant the central bank had to follow through. “If we lose ground in our effort to restore price stability, we will need to do more later to catch up,” she warned.“The labour market data is likely to become much more important than inflation data going forward . . . the main question for the central banks and markets would be when the economy is starting to show reasonable signs of a slowdown,” said one economist. How all this affects the mood of the American consumer is the subject of the new column from US editor at large Gillian Tett, who says optimism is disappearing even as news on employment and inflation appear to be largely positive and retail sales remain surprisingly resilient.One explanation is that the official data is wrong or incomplete, she writes. Another is that the lived experience of consumers is worse than official data imply. Another is that the mood surveys are misleading. Either way, she concludes, “those shoppers are a baffling tribe. So much for America being the land of optimism.”Need to know: UK and Europe economyUK house prices fell 2.6 per cent in June according to mortgage provider Halifax, the fastest annual drop since 2011. Markets now expect UK interest rates to hit 6.5 per cent next March, the highest level since 1998.The FCA watchdog told Britain’s largest banks that it wanted to see faster progress on improving savings rates for customers, as lenders come under fire for profiteering. The FT editorial board said the focus should be on finding co-operative ways to support deposit competition rather than dictating market terms.India’s top trade official said that talks with the UK on a trade agreement were “moving very well” and downplayed hurdles on easing temporary work visas for Indians and opening up industries including automotive and spirits. Luis de Guindos, vice-president of the European Central Bank, said underlying price pressures were starting to soften in another sign that rising interest rates were having an impact. He added however that the job of the ECB “is not yet done”.The Russian rouble hit a 15-month low as the repercussions of mercenary group Wagner’s aborted insurrection piled pressure on a currency already suffering under sanctions. The rouble has lost a third of its value since December.Need to know: Global economyChinese president Xi Jinping’s feared corruption investigators have turned the focus on themselves. An academic said the internal scrutiny likely reflected the “chronic, never-ending” nature of China’s corruption problem, despite graft-busting being one of Xi’s hallmark policies.After 12 years of preparations and more than $200bn spent on infrastructure for the World Cup, what’s next for Qatar? A Big Read examines whether the state of 3mn people, just 400,000 of whom are Qataris, could become an investment destination of choice.Small-scale miners in the Democratic Republic of Congo risk their lives digging up cobalt, the silver metal essential for the world’s transition to clean energy. A Big Read looks at the clean-up needed to bring the “artisanal” industry up to international standards. Former White House official Jennifer Harris said the clean energy transition would demand far more lithium and other commodities than the world is on track to produce.

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Need to know: businessSamsung’s operating profits plunged 96 per cent in the second quarter as chip prices continued to fall due to oversupply, even as it cut production. The company said it was working to capitalise on demand for artificial intelligence wafers.The Dutch government won the right to cut flights at Amsterdam’s Schiphol airport, the most drastic move yet in the EU to tackle noise and pollution caused by the industry. London’s Gatwick airport appears to be going in the opposite direction: it has submitted plans to increase capacity by 60 per cent.Tourists have been swallowing higher prices as the travel industry gets back into full swing since pandemic restrictions were lifted, but slowing economic growth and high interest rates pose risks for hotels and airlines. Summer hotel prices have soared more than 50 per cent in three-quarters of 35 popular European cities this year. Diplomats are nearing agreement on a date for net zero emissions for the highly polluting shipping industry “close to 2050”. The FT editorial board said an international levy on emissions could provide significant funds to modernise shipping, including in emerging markets, as well as ensuring an equitable transition. Danish climate minister Dan Jørgensen agrees: read the latest instalment in our Climate Exchange series.The length of UK office leases has hit the lowest level on record at two years and 10 months, while vacancies rates have soared as the shift to working from home shakes up the market. Science round upUK officials hope to strike a deal on rejoining the EU’s flagship €95.5bn Horizon research programme this month. British researchers have been excluded since 2020 because of a post-Brexit row over Northern Ireland’s trading arrangements.Is Toyota’s “solid state” battery — said to be half the size and cost of current power units — the “holy grail” for the electric car industry? Read our new explainer.A new space-based lightning detector on Europe’s Meteosat Third Generation satellite can predict severe storms from its geostationary orbit 36,000km above the equator over central Africa. Severe storms have caused an estimated €500bn of damage over the past 40 years in Europe alone, Eumetsat said, and they are becoming more frequent as a result of climate change.Blue Origin, the rocket company owned by Amazon founder Jeff Bezos, is hunting for a site to build an international launch facility as well as new partnerships to accelerate the scaling up of its space services.Whether or not aspartame is carcinogenic, we know it is not the healthy option that many consumers believe it to be, says FT science commentator Anjana Ahuja. Next week’s World Health Organization rulings are likely to just stoke confusion on whether artificial sweeteners are good or bad for us. Something for the weekendTry your hand at the range of FT Weekend and daily cryptic crosswords.Some good newsUS regulators approved lecanemab, now known by the brand name Leqemb, as the first Alzheimer’s drug to slow the progression of the disease. An FT Big Read tells the story of how Swedish start-up BioArctic reignited the search for new therapies after Big Pharma had almost given up. More

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The overall U.S. unemployment rate declined in June, but a negative trend among Black workers may be emerging, according to the latest nonfarm payrolls report.
Overall, the unemployment rate last month was 3.6%, a 0.1 percentage point decrease from May, the U.S. Department of Labor reported Friday. However, Black workers saw their unemployment rate rise to 6% in June from 5.6% in May, making it the second consecutive monthly increase.

Within that demographic, unemployment among women ticked higher to 5.4% in June from 5.3% in the prior month. Meanwhile, it grew to 5.9% in June, up from 5.6% in May, for men. The labor force participation rate for Black men inched downward, while women’s fell to 62.9% from 63.9%.

Economists will need to keep an eye out for the next round of payrolls data to determine whether a trend is developing.
“Sometimes we are cautious about saying a one-month change is very significant because sometimes the data is noisy, but a rule of thumb is three numbers is a trend,” said Carmen Sanchez Cumming, a research associate at the Washington Center for Equitable Growth. “If the employment level for Black workers has gone down pretty significantly for the last three months, then that is a red flag.”
Cumming attributed the increase in unemployment among Black workers to the mechanics of the economy slowing down. As the economy rebounded after the pandemic, companies made large leaps to recover the lost positions. For instance, employers boosted wages in a bid to hire more employees. Now that the labor market is reaching pre-pandemic capacity, companies are less likely to continue adding jobs at the same pace.
Additionally, the jobs market could finally be reacting to the Federal Reserve’s interest rate increases, she added.

Meanwhile, Latino workers also saw an increase in the unemployment rate, to 4.3% in June from 4% in May. However, labor force participation inched higher for the group, rising to 67.3%, compared to 66.9% in the previous month.
Hispanic men’s unemployment rate was 3.8% in June, reflecting a decline of 0.2 percentage point from May, while labor force participation held at nearly the same rate. Among Hispanic women, the unemployment rate jumped to 4.1% in June from 3.4% in May, with labor force participation at about the same level as the previous month.
“For Latino workers, it’s a little more murky because their unemployment rate increased this month but had decreased last month,” Cumming said. “Overall, their employment levels are still going up. So, a less clear picture there.” More

Turkey has raised taxes as part of efforts to finance the huge reconstruction bill wrought by February’s devastating earthquake, after a spending bonanza in the run-up to the recent elections. The tax rise comes after president Recep Tayyip Erdoğan promised to swiftly rebuild 650,000 homes that were wrecked by the disaster. Analysts expect the reconstruction cost for residential and commercial buildings and key infrastructure in the vast part of southern Turkey hit by twin tremors could rise as high as $100bn. Mehmet Şimşek, who was appointed finance minister last month, has pledged to restore fiscal “discipline” after the huge giveaways, including free gas and big pay rises for civil servants, in the run-up to May’s vote. Erdoğan won the election to extend his rule of the country to a third decade despite a severe inflation crisis that dented his popularity.Economists expect Turkey’s government budget deficit to jump to 4.5 per cent of gross domestic product this year, from just 0.9 per cent in 2022, according to a FactSet poll taken prior to Friday’s tax announcement, which underscores the perilous public finances. “Given the election and earthquake related deterioration in the budget balance and deeper structural issues, substantial fiscal adjustment was necessary,” said Hakan Kara, a former chief economist at Turkey’s central bank.The tax increases are part of a broader economic shake-up, led by Şimşek and central bank governor Hafize Gaye Erkan, who were both appointed in June to battle an economic crisis triggered by Erdoğan’s unconventional policies. Erkan’s central bank has already nearly doubled interest rates, while the country has backed away from a costly effort to prop up the lira. Under the plans announced on Friday, the main value added tax on goods and services will rise to 20 per cent from 18 per cent. The rate will also be increased by two percentage points to 10 per cent for essential items such as basic food and textiles. Turkey also increased the cost of registering mobile phones purchased abroad by more than three times to TL20,000 ($770) to dissuade consumers from avoiding taxes on consumer electronics. The website used for registering mobile phones became overloaded on Friday as residents rushed to avoid the hike, which goes into effect on Saturday. Liam Peach, at Capital Economics in London, said the VAT rise was “the right thing” since it would help cool consumption, which many analysts say is still overheating after years of very loose monetary and fiscal policies. “The biggest imbalance in Turkey has been the strength of consumption. Spending has been too strong,” Peach said. “Any fiscal measures to rein in that spending are good measures.”The VAT increase will generate government revenues of about 0.8 per cent of GDP, or around $7bn annually, according to Peach, although he also said this would not be enough to sufficiently slow growth and narrow the budget deficit. Kara said he was concerned that since the fiscal tightening was focused on tax rises, which make goods and services more expensive, it may “worsen the short-term inflation outlook”. Inflation has fallen from last year’s highs above 85 per cent, but still registered nearly 40 per cent in June. There is also a risk that revenues from the tax rise “will be spent on salaries and pensions” instead of being saved by the government, Peach added.  More

It’s jobs day, and you know what that means: Charts! The US economy created 209,000 jobs in the June, below the 225,000 print expected. This is the first time the numbers have fallen short of economists’ forecasts in 14 months, according to Bespoke Research. You might’ve seen the chart if you didn’t get rate limited by Twitter before 8:40am EST. Luckily, we logged on to that imploding submersible so you don’t have to:

The second set of charts, which hit our inboxes before NFP, might’ve made a bit more sense after the blowout ADP data. Jim Reid of Deutsche Bank reminds us that changes in labour markets lag behind changes in the broader economy. In other words, people normally don’t start losing their jobs until the recession has already started. Is this widely known? Yes. Are these charts nice anyway? Also yes. Labour-market strength isn’t irrelevant for the future economic outlook, obviously. The forward-looking relevance is primarily its effect on Fed policy. The only thing this week’s jobs data has done is reinforce investors’ belief that the central bank is going to raise rates at its July 25-26 meeting. So here’s your bonus chart for the day:

The fed funds futures market still has that 5.25 to 5.5-per-cent level as the terminal rate, more or less. Over the past month the market has started to coalesce around a cut back to 5-per-cent rates in May of 2024. But futures liquidity gets worse the further you go into the future, so make of that what you will. More

Nonfarm payrolls increased 209,000 in June, below the consensus estimate for 240,000.
The unemployment rate was 3.6%, down 0.1 percentage point. However, a more encompassing jobless level rose to 6.9%.
Government hiring led the job gains, followed by health care, social assistance and construction.
Wages rose 4.4% from a year ago, slightly higher than expectations.

Employment growth eased in June, taking some steam out of what had been a stunningly strong labor market.
Nonfarm payrolls increased 209,000 in June and the unemployment rate was 3.6%, the Labor Department reported Friday. That compared to the Dow Jones consensus estimates for growth of 240,000 and a jobless level of 3.6%.

The total, while still solid from a historical perspective, marked a considerable drop from May’s downwardly revised total of 306,000 and was the slowest month for job creation since payrolls fell by 268,000 in December 2020. The unemployment rate declined 0.1 percentage point.
Closely watched wages numbers were slightly stronger than expected. Average hourly earnings increased by 0.4% for the month and 4.4% from a year ago.

Job growth would have been even lighter without a boost in government jobs, which increased by 60,000, almost all of which came from the state and local levels.
Other sectors showing strong gains were health care (41,000), social assistance (24,000) and construction (23,000).
Leisure and hospitality, which had been the strongest job-growth engine over the past three years, added just 21,000 jobs for the month. The sector has cooled off considerably, showing only muted gains for the past three months.

The retail sector lost 11,000 jobs in June while transportation and warehousing saw a decline of 7,000.
There had been some anticipation that the Labor Department report could show a much higher than anticipated number after payrolls processing firm ADP on Thursday reported growth in private sector jobs of 497,000.
Markets moved lower following the release of the jobs report, with futures tied to the Dow Jones Industrial Average off nearly 90 points. Longer-dated Treasury yields were slightly higher.
“A 209,000 increase in payrolls can hardly be described as weak,” said Seema Shah, chief global strategist at Principal Asset Management. “But after yesterday’s ADP wrongfooted investors into expecting another bumper jobs number, the market may be disappointed.”
The labor force participation rate, considered a key metric for resolving a sharp divide between worker demand and supply, held steady at 62.6% for the fourth consecutive month and is still below its pre-pandemic level. However, the prime-age participation rate — measuring those between 25 and 54 years of age — rose to 83.5%, its highest in 21 years.
A more encompassing unemployment rate that includes discouraged workers and those holding part-time jobs for economic reasons rose to 6.9%, the highest since August 2022. At the same time, the unemployment rate for Blacks jumped to 6%, a 0.4 percentage point increase, and rose to 3.2% for Asians, a 0.3 percentage point rise.
In addition to a downward revision of 33,000 for the May count, the Bureau of Labor Statistics sliced April’s total by 77,000 to 217,000. That brought the six-month average to 278,000, down sharply from 399,000 in 2022.
The jobs numbers are considered a key in determining where Federal Reserve monetary policy is headed.
Policymakers see the strong jobs market and the supply-demand imbalance as helping propel inflation that around this time in 2022 was running at its highest level in 41 years.
They are using interest rate increases to try to cool the economy, but the labor market thus far has defied the central bank’s tightening efforts.
In recent days, Fed officials have provided indication that more rate hikes are likely even though they decided against moving at the June meeting.
Markets widely expect a quarter percentage point increase in July that would take the Fed’s benchmark borrowing rate to a targeted range between 5.25%-5.5%. The outlook was little changed following the release, with traders pricing in a 92.4% chance of a hike at the July 25-26 meeting.
The June report “suggests labor market conditions are finally beginning to ease more markedly,” wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics. “That said, it is unlikely to stop the Fed from hiking rates again later this month, particularly when the downward trend in wage growth appears to be stalling.” More