Strong labour market complicates Fed outlook
Non-farm payrolls stronger than expected, focusing extra attention on Jerome Powell’s testimony this week
Markets remain almost certain that the Federal Reserve will cut its policy rate at the July 30–31 meeting, but unexpectedly strong labour market figures are adding fresh complications to what is already a complex decision.
Non-farm payroll figures released on July 5 were substantially higher than expected, with 224,000 jobs added in June, comfortably above the consensus forecast of 160,000. Unemployment ticked up to 3.7% amid a small rise in participation.
The stronger economic data sent
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