US Economy Loses Jobs, Emboldening Fed Doves Ahead of Rate Hike Decision

The recent labor market update from the Bureau of Labor Statistics (BLS) shows that the US economy lost jobs in July, with revisions suggesting slower hiring during May and June than previously reported.

This development is likely to embolden Fed doves, who may use it as an excuse to hold off on rate hikes. In fact, Kevin Warsh has already been criticized for his dissembling at a recent press conference, which some see as evidence that he is not independent from Donald Trump's influence.

The BLS's monthly labor market update is expected to show steady inflation in July, with the headline gauge printing a 0.1% advance versus the prior month. The core CPI is seen rising 0.2% MoM, which would be another cool readout that adds to the case for holding rates.

On a YoY basis, the core gauge is expected to rise by 2.5%, which would be the slowest since the war started. If this figure manages an unrounded print below 2.45656%, it would be the lowest since March of 2021.