US jobs report shows hiring slowdown, September rate hike expectations recede, says BMO economist
Macro Impact 4
BMO Senior US Economist Scott Anderson noted that the July US employment report was weak in terms of job creation, pushing back expectations for a September rate hike. Nonfarm payrolls unexpectedly fell by 23,000 from the previous month, with downward revisions of 103,000 over the past two months. Average hourly earnings growth slowed to a 0.1 percent month-over-month increase, and the year-over-year rise of 3.2 percent was the slowest since February 2020. The unemployment rate edged down 0.1 percentage point to 4.1 percent, but the labor force participation rate fell to 61.4 percent, and the labor force shrank by about 1 million over the past two months. Anderson maintained his forecast that there will be no rate hike this year, and expressed the view that the deteriorating labor market will weigh heavily on real personal consumption growth in the third quarter.
