Labor Market Insights and Powell’s Praise for Inflation Reduction in Portugal

This week, the labor market is expected to provide valuable insight into the overall health of the economy. The ADP private employment report and the Bureau of Labor Statistics employment report, both set to be released soon, are anticipated to reveal some important information. Economists predict that employers added 200,000 jobs in June, with the unemployment rate remaining at 4%. This projection is lower than May’s job additions of 272,000 jobs.

While many experts were expecting a decline in job openings in May due to the slowing economy, a surprising trend emerged: job openings remained relatively stable. In May, 8.1 million job openings were reported, which was viewed positively by economists as they saw little change in hires and quits. A strong labor market provides more time for the Federal Reserve to evaluate its next steps before making any changes to interest rates.

In other news from Portugal this week, Federal Reserve Chair Jerome Powell praised significant progress towards reducing inflation during a roundtable discussion at an European Central Bank conference. Powell discussed how the Personal Consumption Expenditures (PCE) price index has decreased since its peak in June 2022 and has been moving closer to the central bank’s 2% target despite some bumps in the road during Q1 of this year. To make any changes to monetary policy, Powell emphasized that it’s crucial to be confident that inflation is sustainably moving towards 2%.