MNI BRIEF: US Unemployment Unexpectedly Rises To 4.3%
MNI (WASHINGTON) - The U.S. unemployment rate unexpectedly rose by two-tenths to 4.3% in July and hiring was weaker than expected at 114,000 with downward revisions to previous months, prompting markets to price in faster than expected easing by the Federal Reserve. The 10-year yield fell to its lowest since December.
Markets had expected a 175,000 increase in nonfarm payrolls and the unemployment rate to stay steady at 4.1%. Wage growth also decelerated to 0.229% from 0.315% the previous month. Average hourly earnings added 3.6% over the past 12 months. Hurricane Beryl hit Texas during the reference week for both the household and establishment surveys but had "no discernible effect on the data," the Bureau of Labor Statistics said Friday.
Fed Chair Jerome Powell on Wednesday said the FOMC is "prepared to respond" if the labor market were to weaken unexpectedly, but a half-point rate cut is not something the committee is thinking about right now. (See: MNI INTERVIEW: Fed Could Be Forced To Play Catch Up - Coronado)