Strength of labor market being tested by high interest rates

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Labor Market News

Interest Rates,Unemployment,Federal Reserve

Jobs added on a monthly basis has also cooled considerably as the labor market continues to realign from the highs of the economic resurgence.

Economists and the Federal Reserve will get another key piece of data as the central bank debates when to enact its first cut to interest rates this week with the release of a new jobs report in another test for the strength of the labor market beneath the weight of slower growth and higher rates.

, growth accelerated with employers adding 272,000 jobs but the data from May also showed signs of slowdowns with higher unemployment and openings falling to a three-year low. "If either of these key metrics fails to match expectations, it could raise concerns about the risk of a more significant slowdown in the job market and beyond,” said Mark Hamrick, Bankrate’s senior economist. “On the other hand, if the report largely matches expectations or exceeds them, the continued resilience of the economy would be affirmed."

The Fed has been able to avoid a frequently predicted recession despite raising rates at the fastest rate in decades and is trying to pull off the final phase of its soft landing, where inflation returns to normal levels without the economy going into a tailspin.

 

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