Robust hiring figures from the most recent employment report have prompted President Trump to renew demands for Federal Reserve interest rate reductions. According to reports from The Kobeissi Letter, US employers added 162,000 positions in August, nearly tripling economist forecasts of 55,000 and marking a sharp rebound from prior weakness.
During the same period, the unemployment rate held steady at 4.1%, while revisions lifted earlier months' tallies. Following the report, President Trump stated on social media that the central bank must lower interest rates because the United States represents a stronger credit risk than before.
President Trump argued on social media that the US should have the lowest rate of any country in the world, threatening to halt trading with countries with which the US has a deficit if rates are not lowered. The US runs its largest trade deficits with partners including China, Mexico, and Canada, totaling over $1.2 trillion annually according to The Wall Street Journal.
Despite the strong employment data, the stock market fell as investors braced for a potential Federal Reserve rate hike. The Kobeissi Letter noted that markets dropped because strong jobs data increases the probability of rate hikes following 60 straight months of 2% plus inflation. Consequently, the odds of a Fed rate hike at the upcoming September meeting have surged to approximately 53%.
