The main driver of the red headline was a loss of 53,000 government jobs, while private payrolls actually rose 30,000. Some economists are calling this seasonal noise that could reverse next month. Fine to be optimistic about that, but average hourly earnings only grew 3.2% year-on-year, the weakest pace since May 2021. If this really is just seasonal noise, why is worker purchasing power slowing at the same time?
The Fed is now caught between two pulls that won't reconcile. The labor data argues for easing. Brent crude holding above $88 a barrel on renewed Middle East escalation argues for tightening. The next decision doesn't land until September 16, and the six weeks in between will likely be filled with markets whipsawing on every Fed official's speech.
The US China Trade War Has Moved from Tariffs to a Technology Regime
On August 5, China's Commerce Ministry announced export controls on drones and a ban on transactions with six American entities, including Applied DNA Sciences and the advocacy group Human Rights in China. The move was retaliation for FCC restrictions on Chinese drone imports and the addition of dozens more Chinese firms to the Uyghur Forced Labor Prevention Act entity list by the Department of Homeland Security. Eight days later, Washington hit back again, and China's embassy responded sharply through a statement to the South China Morning Post.