Photo: poider.com
By Isaac Cohen*
Recent revisions of previously released employment figures, by the US Labor Department, support the prediction that the central bank will start lowering interest rates at its next meeting, in Washington on September 18.
August employment figures, at 142,000 new jobs, also revealed a slowdown, from a monthly average of 220,000 in the year before past June. Additionally, the sizable revision to previously released figures confirmed, the cooldown in the labor market. Employment figures in June were revised down to 118,000 from 179,000, while the July figure decreased to 89,000 from 114,000.
Federal Reserve chairman Jerome Powell, at a meeting last month in Jackson Hole, Wyoming, recognized the labor market “has cooled considerably,” adding “we do not seek or welcome further cooling in labor market conditions.” Therefore, he concluded, “the time has come for policy to adjust.” Furthermore, Federal Reserve governor Christopher J. Waller went a step ahead saying, “I believe it is important to start the rate cutting process at our next meeting.”
The meeting next week of the central bank’s Open Market Committee will be the last before the November elections. The question now is about the amount of the rebate, which will mostly depend on the labor market outlook.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
