Slowdown signs
Signals from the US labor market became decidedly less mixed as of Friday: The government's latest monthly jobs report showed an unambiguous slowdown across almost every major metric.
Payroll growth — perhaps the most important number — decelerated on a three-month basis to the least since January 2021.
The unemployment rate rose to 4.1%, the highest since November 2021. And wage growth cooled to 3.9%, the slowest since May 2021.
For Federal Reserve Chair Jerome Powell and his colleagues, the numbers will be hard to ignore.
Just days before the report, at a conference hosted by the European Central Bank, Powell described the US job market as "strong," though he also hinted it may be approaching an inflection point of sorts.
Combine the latest trends in the labor-market data with the recent slowdown in the inflation numbers, and it's no surprise that investors are currently betting the US central bank will opt for interest-rate cuts in September and December.
Testimony Week
The Fed chief heads to Capitol Hill on Tuesday and Wednesday for semiannual testimony before Congress, and is expected to be grilled by Democratic lawmakers wondering why he hasn't already begun easing monetary policy.
How Powell chooses to characterize the jobs picture after Friday's report will be key in helping cement expectations for a September rate cut.
There's only one more policy meeting between now and then — concluding on July 31 — and if Fed officials think they'll be ready to make a move in September, the upcoming meeting will be their last chance to offer a formal advance signal to that effect.
The Week Ahead
Aside from Powell's testimony, June consumer price index data released on Thursday will be a highlight for investors this week.
The so-called core CPI, which excludes food and energy costs and is seen as a better measure of underlying inflation, is expected to rise 0.2% in June for a second month. That would mark the smallest back-to-back gains since August, a pace more palatable for Fed officials.
Elsewhere in the world, rate decisions in South Korea, New Zealand and Peru, and inflation numbers from China to Sweden to Brazil will be highlights.
Need-to-Know Research
Prices for globally traded goods held steady in the first quarter, but were expected to increase in the second, "with trade growing faster in values than in volumes," according to an UNCTAD report this month.
"Despite this uptick, the annual change in the price for traded goods is expected to remain negative," UNCTAD said in the report.
Payroll growth — perhaps the most important number — decelerated on a three-month basis to the least since January 2021.
The unemployment rate rose to 4.1%, the highest since November 2021. And wage growth cooled to 3.9%, the slowest since May 2021.
For Federal Reserve Chair Jerome Powell and his colleagues, the numbers will be hard to ignore.
Just days before the report, at a conference hosted by the European Central Bank, Powell described the US job market as "strong," though he also hinted it may be approaching an inflection point of sorts.
Combine the latest trends in the labor-market data with the recent slowdown in the inflation numbers, and it's no surprise that investors are currently betting the US central bank will opt for interest-rate cuts in September and December.
Testimony Week
The Fed chief heads to Capitol Hill on Tuesday and Wednesday for semiannual testimony before Congress, and is expected to be grilled by Democratic lawmakers wondering why he hasn't already begun easing monetary policy.
How Powell chooses to characterize the jobs picture after Friday's report will be key in helping cement expectations for a September rate cut.
There's only one more policy meeting between now and then — concluding on July 31 — and if Fed officials think they'll be ready to make a move in September, the upcoming meeting will be their last chance to offer a formal advance signal to that effect.
The Week Ahead
Aside from Powell's testimony, June consumer price index data released on Thursday will be a highlight for investors this week.
The so-called core CPI, which excludes food and energy costs and is seen as a better measure of underlying inflation, is expected to rise 0.2% in June for a second month. That would mark the smallest back-to-back gains since August, a pace more palatable for Fed officials.
Source: Bloomberg
Elsewhere in the world, rate decisions in South Korea, New Zealand and Peru, and inflation numbers from China to Sweden to Brazil will be highlights.
Need-to-Know Research
Prices for globally traded goods held steady in the first quarter, but were expected to increase in the second, "with trade growing faster in values than in volumes," according to an UNCTAD report this month.
Source: UNCTAD
"Despite this uptick, the annual change in the price for traded goods is expected to remain negative," UNCTAD said in the report.
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