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( NewsNation ) — Recent economic reports may further pave the way for the Federal Reserve to lower interest rates later this month.
The Labor Department reported Friday that U.S. employers added 142,000 jobs last month. That’s considered a modest increase, but still greater than July’s 89,000 jobs gained. The national unemployment rate in August dropped to 4.2% from 4.3% in July.
“The labor market is weakening,” Eugenio Aleman, chief economist at Raymond James Financial, told AP. “It is not falling apart, but it is weakening.”
The payroll firm ADP reported that private employers added 99,000 jobs nationwide in August. That’s the smallest increase in that number since January of 2021.
“The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” said ADP chief economist Nela Richardson.
“The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown,” she added.
20% of student loan recipients aren’t making payments: Report The outplacement company Challenger, Gray and Christmas tracked nearly 76,000 layoffs last month. That’s about triple the number of layoffs counted in July – the largest month-to-month increase in a year.
“August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics. Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management,” Challenger Vice President Andrew Challenger said in a statement.
More than half of August’s cut announcements were in the tech sector, totaling 39,563, up sharply from around 6,000 in July and the most since January 2023. The health sector had the next largest announced layoffs at 6,158.
Prequalified versus preapproved: Here’s the difference The various economic reports are considered strong hints that the Fed will cut its key interest rate when it meets later this month. Christopher Waller, an influential Fed policymaker, suggested in a speech Friday that the central bank is leaning toward a quarter-point reduction this month.
“I do not expect this first cut to be the last,” Waller said in a speech at the University of Notre Dame. “With inflation and employment near our longer-run goals, and the labor market moderating, it is likely that a series of reductions will be appropriate.”
Friday’s Effective Feder a l Funds Rate, which banks charge each other for overnight loans, was 5.25% to 5.50%. That rate plays a significant role in consumer interest rates, such as home mortgages.
The rate for a 30-year fixed-rate mortgage is currently around 5.8% . In January of 2021, when the world was still in the grips of the COVID pandemic, the rate was as low as 2.65%
Reuters and The Associated Press contributed to this report
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