'The labor market is normalizing,' no recession in sight: Economist

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Labor Market News

Jobless Claims,Aditya Bhave,Federal Reserve

US jobless claims for the week ending on August 10 came in at 227,000, much less than Wall Street expected. The data signals the labor market has not slowed ...

US jobless claims for the week ending on August 10 came in at 227,000, much less than Wall Street expected. The data signals the labor market has not slowed down as much as some previously thought. If the Federal Reserve decides to cut rates in September, could that be a headwind or tailwind for the labor market?

In terms of a rate cut from the Fed, Bhave believes :"We are of the view that the data flow, both on inflation, which was just a little bit stickier than the Fed would like in housing as well as activity, labor market, all of that suggests that the Fed can cut and it will cut in September, in our view, by 25 basis points. But there isn't a need right now for super-sized cuts or accelerated cuts, namely once per meeting.

So what does this all tell us about the chances of a rate cut next month, the size that we're going to get and then ultimately looking past the September meeting, what we'll likely see between now and your end?So we are of the view that the data flow both on inflation, which was just a little bit stickier than the Fed would like in housing as well as activity labour market.

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