The US labor market’s strength over the past two years has allowed the Federal Reserve to take a cautious approach to lowering borrowing costs. Despite adding 206,000 jobs in June, surpassing forecasts but down from the previous month, as economists expected non-farm payrolls to have increased by 190,000, the Bureau of Labor Statistics’ report on Friday also revealed a slight increase in the US unemployment rate from 4.0% to 4.1%.
Just days after the minutes of the central bank’s June meeting showed members of the rate-setting committee were more attentive to the downside risks to the US labor market, Friday’s data provides further insight into this developing story. The Federal Reserve is closely monitoring employment conditions and inflation to guide its decision on when to begin an interest rate cutting cycle.
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