In the United States, the labor market is experiencing a high level of activity, with an increase of 272,000 employed people in May, surpassing expectations. The Labor Department reported this data, indicating a strong performance in the labor market despite the tight monetary policy of the central bank.
The unemployment rate in May was 4.0 percent, slightly higher than April’s rate of 3.9 percent. Typically, unemployment and inflation have an inverse relationship, with inflation slowing down when unemployment rises. The stronger-than-expected increase in employed individuals led to a rise in market interest rates on federal bonds.
Financial markets anticipate that the central bank will maintain its key interest rate between 5.25-5.50 percent, reflecting a tight monetary policy similar to that of 2001. The central bank has expressed a desire to see more evidence of inflation slowing down before considering a rate cut.
Looking ahead, financial experts predict that interest rate cuts may not occur until the fall as they anticipate inflation rates and employment growth remaining stable for some time before any decision is made by the central bank regarding monetary policy adjustments.
