Economic Insight: Lower Unemployment, Faster Wage Growth Keeps Fed on Target for July Rate Hike
Nonfarm payrolls increased by 209k in June, below estimates, while the jobless rate declined and monthly wage growth ticked up.?
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Hiring momentum appears to be cooling, yet job creation remains positive and for the Fed, the headline number is far less important than the underlying components: a decline in the unemployment rate, an increase in wage growth, this is this exact opposite of what policy makers have been looking for. This lack of improvement in wage inflation specifically will keep the Committee on target for another round rate hike later this month. If anything, the uneven June employment report eliminates rising pressure on the Fed to perhaps reengage at a more robust pace had there been an upside surprise on all fronts.?
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This week, we take a closer look at the state of the U.S. labor market and what it means for future Fed policy decisions and the economy going forward.?
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