CUNA Economics: Job Market Continues to Cool

Credit Union National Association (CUNA) Senior Economist Ligia Vado, PhD, issued the following statement in response to the Labor Department’s August Employment Situation:     

“The U.S. economy added 187,000 nonfarm jobs in August 2023, and the unemployment rate rose to 3.8% from 3.5%, reported the U.S. Bureau of Labor Statistics today.  

“August’s employment additions are slightly higher than the consensus economic forecast of 170,000 but support a continued and slow deceleration in the labor market when compared to the average monthly job gains over the prior 12 months of 271,000. 

“This is good news for the Federal Reserve efforts of reducing inflation, as it signals that the labor market is cooling off. The new labor market statistics also reinforce the policy consensus and CUNA's economic forecast that there is a strong possibility that the Federal Reserve Bank will pause its aggressive hikes of the Fed Fund rate for the remaining of the year. 

“However, there is still uncertainty on the time span the Federal Reserve will keep interest rates high, and this timeline will depend on the evolution of several metrics such as core inflation, which remains elevated for policy standards.”