usa employment rebounded in August, with summer employment growth data lower than the initial reports.

According to the Department of Labor data, the U.S. economy added 0.142 million jobs, higher than July, which raised concerns about economic slowdown and shook global financial markets; the August unemployment rate dropped to 4.2%.

The Department of Labor revised down estimates of job growth in June and July, reducing a total of 86,000 positions, further indicating soft summer hirings.

The latest nonfarm payroll report may not definitively address whether the Fed will cut rates by 25 basis points in September or by 50 basis points to guard against unwanted softening in the job market.

Michelle Girard, head of NatWest's U.S. division, believes that this employment report "will not steer anyone away from their prior positions." She notes that the report supports those who think the Fed will cut rates by 25 basis points because it shows the labor market's continued resilience, while with the previous values revised downward, there's also a case for a 50-basis-point cut.

Girard emphasizes the Fed's heightened focus on inflation, mainly concerned about whether they can reach the 2% inflation target. However, she points out that there is "sufficient evidence" indicating a downward trend in inflation, hence the Fed's focus is now on the economy. Girard says:

"In terms of the economy, it's clear that the economy is slowing down. Therefore, I believe the real discussion for the Fed is where do you believe rates should ultimately be? Or what level do you think you need to get to? Because I think that plays a crucial role in the scale of the actions you will take.

After the release of the report on Friday, gold gave back some of its intraday gains, while silver fell more than 1%. US stocks continued to decline, with the Nasdaq falling more than 2% and the S&P 500 index falling more than 1%.

New York Fed President Williams echoed recent comments from other Fed officials that a rate cut is imminent in his speech shortly after the employment data was released.

Williams stated, "Now is an appropriate time to reduce the degree of policy stance constraint by lowering the target range for the federal funds rate." He said that with inflation close to the Fed's 2% target, "the economy is in balance and the monetary policy stance can gradually shift towards a more neutral position over time."

Fed Governor Waller also stated that maintaining forward momentum in the economy means that the time has come to begin lowering policy rates at the upcoming meeting.

But what is most notable is that Waller indicated that he would support an "early" rate cut if appropriate, and if necessary, he would support a larger rate cut. This may indicate his willingness to directly cut rates by 50 basis points to start the Fed's rate-cutting cycle.

The non-farm payroll report is one of the most anticipated economic indicators in recent years, and the August report coincides with the timing of the Fed preparing to cut rates.

Since 2022, investors and the Fed have been focused on inflation as a signal of potential overheating in the US economy. But with recent price pressures easing, economists are turning their attention to concerning signs in the labor market, which has previously provided widespread returns for Americans through higher wages and increased productivity.

A month ago, weaker-than-expected July non-farm payrolls reignited concerns about an economic slowdown, with initial jobless claims rising and job openings decreasing, while wage growth is slowing down. A series of weak economic data shocked Wall Street in early August and led to a global sell-off, briefly pushing the record-breaking US stock market into one of its most volatile periods in years.

One major question in recent weeks is whether the market volatility in the summer is temporary, or if it is evidence of the overall economic slowdown caused by the hurricane that has suppressed recruitment.

This answer is likely to be a crucial factor in determining the winner of the US presidential election. Vice President Harris is widely promoting the extension of Biden's agenda, while Republican candidate Trump promises to restore the US economy to pre-COVID-19 levels.