The last report on the US labor market has confirmed the wisdom of resisting the temptation of cutting interest rates, amid the pronounced uncertainty caused by the seesaw on tariffs, raids against foreign workers and the barrage of insults and threats against the head of the central bank.
Last week, the Labor Department informed 147,000 new, nonagricultural jobs were created in June, with the unemployment rate stable at 4.1 percent. Mainly three sectors accounted for the new hiring, state and local governments, healthcare, leisure and hospitality, together created over 132,000 new jobs in June, while manufacturing and other sectors reliant on foreign workers lost jobs. Therefore, the head of the central bank Jerome Powell, at the European Central Bank yearly conference in Portugal, last week said it is prudent to wait, as long as the US economy remains in “solid shape.”
Additionally, the pause of 90 days in the imposition of tariffs, expected to end on July 9, was extended until August 1st. The 90-day pause, it should be recalled, was decreed by the White House after the plunge in the stock market, between February 10 and April 8. The extension until August was granted to try to achieve more framework trade agreements, as those already signed with the United Kingdom and Vietnam.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
