The US economy added 73,000 nonfarm payroll jobs last month, the Bureau of Labor Statistics said, well below the 100,000 anticipated in a Dow Jones estimate.
There were “plenty of other signs of weakness” in that report, according to TD director and senior economist Thomas Feltmate. He highlighted that the duration of unemployment had jumped to its highest level for over three years, with the breadth of private industry hiring still significantly lower than what’s usually seen in a balanced labor market.
That could change the picture when it comes to the Fed’s plans for the rest of 2025. “Stability in the labor market has been a major factor keeping the Fed on the sidelines through this year,” Feltmate wrote.
“But with that narrative now shattered, and two voting members already advocating for rate cuts, the prospect of a September cut is looking increasingly likely.”
Fed futures are now pricing in an 80% probability of a September cut, he added, compared with the roughly 50-50 chance seen before today’s data.