Robust hiring figures in the most recent employment report have prompted President Trump to spark fresh demands for Federal Reserve interest rate reductions.
Employers added 162,000 positions in August, surpassing economist forecasts of 55,0000 by nearly three times and marking a sharp rebound from prior weakness, reports The Kobeissi Letter.
The unemployment rate held steady at 4.1% while revisions lifted earlier months’ tallies.
President Trump stated on social media that the central bank must lower rates because the United States represents a stronger credit risk than before.
“STRONG COUNTRY MEANS A LOWER INTEREST RATE – IT’S A BETTER CREDIT…Very simple! We should have the LOWEST RATE of any country in the World, like ‘the old days.’ Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE! LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT…”
The US runs its largest deficits with partners including China, Mexico, and Canada, totaling over $1.2 trillion annually according to The Wall Street Journal.
Despite the strong jobs data, the stock market fell as investors brace for a potential Fed rate hike, says The Kobeissi Letter.
“You know the system is broken when stocks FALL after the US unexpectedly adds +162,000 jobs in a month, TRIPLING expectations.
Why? Because a strong jobs report means a higher chance of rate hikes.
This is the product of 60 straight months of 2%+ inflation.
Markets now ‘want’ a labor market collapse.”
The odds of a Fed rate hike at the September meeting have surged to around 53%.
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President Trump urged Federal Reserve rate cuts following a robust August jobs report and threatened to halt trade with deficit nations if the central bank does not act.
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