August jobs report to confirm July weakness, forcing Fed into 50bp Sept. rate cut
Investing.com -- The August jobs report is likely to show the weak labor market seen in July wasn't transitory, paving the way for the Fed to kick off the rate cutting cycle with a jumbo cut, economists at Citi said in a recent note.
Following the soft July jobs report, many were convinced that the Fed would have to cut 50bp to stave off recession, with some even calling for an emergency cut. But as the economic updates poured in including positive jobless claims data, the initial worries about a recession were cast aside and bets on 25bp cut took center stage.
Even if the unemployment dips slightly, signaling a slight, one-month improvement in the labor market, this may not be"enough to convince Fed officials that the risks of further softening have abated," Citi added.
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