Recent reviews of the employment figures, by the United States Department of Labor, support the prediction that the Central Bank will begin to reduce the interest rate at its next meeting, in Washington, on September 18.
The employment figures in August, in 142,000 new jobs, also revealed a slowdown, from the monthly average of 220,000 of the year before June.
In addition, the large review of the previously announced figures confirmed the cooling of the labor market. The employment figures in June were reviewed down to 118,000 from 179,000, while the July figure decreased to 89,000 from 114,000.
The president of the Federal Reserve, Jerome Powell, at a meeting last month in Jackson Hole, Wyoming, acknowledged that the labor market “has cooled considerably” and added “we do not seek or accept more cooling in the labor market.”
Therefore, he concluded, “the time has come to adjust the policy.” Moreover, the governor of the Federal Reserve, Christopher J. Waller, took a step more saying, “I think it is important to start the process of cutting the rate during our next meeting.”
Next week, the Central Bank’s open market committee meeting will be the last before the November elections.
The question now is about the amount of the reduction, which depends mostly on the landscape of the labor market.
By: Isaac Cohen, international analyst and consultant, former director of the ECLAC office in Washington. Commentator of Economics and Finance of CNN in Spanish TV and Radio, Univision, Telemundo and other media
