US Jobs Figures Fuel Rate Hike Expectations as Economy Surpasses Forecasts
The US economy has exceeded expectations, adding 162,000 jobs in August, nearly triple the forecasted 56,000. This boost is largely attributed to increased employment in hospitality and education sectors, with restaurants and bars seeing a resurgence as the summer months drew to a close.
As a result of these stronger-than-expected job figures, expectations for an interest rate hike by the Federal Reserve have grown. Last week, Kevin Warsh, head of the Fed, hinted that rates could increase if policymakers were not confident in price rises easing for Americans. Inflation remains above the 2% annual target, with prices up 3.4% over the past 12 months.
US diesel prices have hit an all-time high of $5.85 per gallon on average, causing concerns about inflation due to global oil prices surging following the conflict between the US and Iran. Economists are now warning that even those who previously opposed a rate hike would struggle to justify keeping rates unchanged in light of these figures.