Cooling job market and anticipation of lower interest rates: a “soft landing” for the US economy

In June 2024, the U.S. labor market added 206,000 job openings, with the largest growth in the public services, education, and healthcare sectors.

Along with the number of vacancies, the unemployment rate also rose to 4.1%, exceeding the 4% mark for the first time since November 2021. Wage growth also slowed to 3.9% year-on-year, the lowest in three years.

From the Fed’s perspective, the slight cooling of the labor market should reduce inflationary pressures, providing the US economy with a “soft landing” and giving the Fed the opportunity to start cutting interest rates as early as the fall of 2024. At its last meeting in June, the Fed kept interest rates at the current level.