Fresh data showing the labor marke﷽t decelerating adds pressure to the Federal Reserve to cut inteꩵrest rates faster, but not enough to make a jumbo-sized rate cut a foregone conclusion.

Friday's report on the job market from the Department of Labor showed the economy added 142,000 jobs in August, short of the 161,000 economists had forecast. Not only that, but the previous two months of already lackluster job growth were downwardly revised by a total of 86,000.

The report affected the outlook for interest rates on all kinds of loans. With the job market still cooling, some investors view Fed officials as more likely to cut the key 澳洲幸运5官方开奖结果体彩网:fed funds rate by half a point at their next meeting rather th🀅an a less aggressive quarter-poin🐻t cut.

The odds of a jumbo rate cut jumped in the wake of the report as investors tried to digest what this report could mean for the central bank.

Not A Clear Cut Case For a Quarter-Point Cut

The report didn't cut strongly enough one way or the other to make it obvious which way the Fed would decide.

"An especially strong or weak employment report could have crystallized the 25 or 50 bps rate cut debate for the FOMC's upcoming meeting," wrote Wells Fargo Economists Sarah House and Michael Pugliese. "Instead, today's data have offered something for both the hawks and the doves on the Committee."

The data also showed that the unemployment rate dipped to 4.2% from 4.3% in July. Job growth in August was also better than the 89,000 jobs added in July. That's a positive sign that the market was rebounding somewhat after an unexpected slump that may have been partly due to the weather.

Chances Could Continue To Shift Before Meeting

Rate cut bets swung up and down as markets digested the mixed data, with the odds of a 50 澳洲幸运5官方开奖结果体彩网:basis point cut getting as high as 59% before falling back down, according to the CME Group’s FedWatch tool, which forecasts rate cut movements based on fed funds futures trading data.

However, investors se🦩ttled at a 27% chance later in the day, lower than where it was before the jobs report came out.

Financial markets and Fed officials are monitoring official government reports on the labor market 澳洲幸运5官方开奖结果体彩网:more closely than usual these days.

The Fed is preparing to cut its benchmark interest rate. Officials have signaled a campaign of cuts will begin at the September 17-18 meeting of the central bank's policy committee.

A cut would reverse the course of the central bank's interest rate policy for the past two years. Starting in March 2022, the central bank raised the fed funds rate from near zero to a range of 5.25-5.5%, its highest since 2001. The Fed hoped to quash inflation by raising borrowing costs on all kinds of loans.

With inflation cooling and approaching the Fed’s goal of a 2% annual rate, officials have 澳洲幸运5官方开奖结果体彩网:voiced more concerns about the job market's health. The high fed funds rate has pushed borrowing costs for mortgages, car loans, and other cre🐎dit to their highest in decades, discouraging purꦓchases and reducing demand for workers.

Rate cuts could help boost busiꦛness, but officials are wary of cutting rates too fast and reigniting inflation.

Update, Sept. 6, 2024: This article has been updated with additional analysis from economists and updated predictions from CME Group.