Now Reading: US families squeezed as inflation, jobs slowdown persist
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US families squeezed as inflation, jobs slowdown persist
Lower- and middle-income Americans are struggling with rising costs as inflation remains above the Fed's 2% target and the labour market weakens, Boston Federal Reserve President Susan Collins warned. The Fed kept…
The Story in Brief
Lower- and middle-income Americans are struggling with rising costs as inflation remains above the Fed's 2% target and the labour market weakens, Boston Federal Reserve President Susan Collins warned. The Fed kept rates unchanged in July but a September hike remains possible, with three policymakers favouring an immediate increase. Energy prices have risen due to the US-Iran conflict affecting oil shipments through the Strait of Hormuz.
The US economy lost 23,000 jobs in July, while average monthly job growth over the past three months fell to about 20,000, compared with 73,000 during the first quarter. Collins said the weak data should be viewed cautiously as private-sector hiring remains positive and unemployment is relatively stable. The combination of persistent inflation and slower hiring leaves the Fed facing a difficult policy choice.
The Indian Opinion
The narrative that the Fed faces a simple trade-off between inflation and employment misses the point: both are already squeezing American households. Those who demand immediate rate hikes ignore the slowing job market, while those urging cuts forget that energy prices remain elevated. The real test will be the August consumer price index and payrolls report due before the September meeting. If inflation stays sticky above 3%, another hike becomes hard to avoid.
Source: english.mathrubhumi.com
This story was synthesised by AI from the source linked above.
