PANews reported on August 2 that Federal Reserve official and Powell ally Williams stated, "The condition of the labor market I have observed over the past year can be described as 'moderate and gradual cooling,' but overall it remains robust." Although the unemployment rate slightly increased to 4.2% in July (up from 4.1% in June), the relatively weak non-farm data provided space for Powell to promote consensus on rate cuts.
Williams pointed out that the employment growth data for May and June has been significantly revised downward, which is the real focus of this report. He stated, "This information is crucial and helps us understand the trends in labor supply and demand, as well as the cooling trend of the labor market momentum." Regarding the possibility of an interest rate cut in September, Williams was cautious and did not endorse the market's expectations of an 80% chance of a rate cut. He said, "The challenges faced by market participants are the same as those we, as policymakers, face. I believe the direction of the market's reaction to signals is understandable." Williams expects that the U.S. economic growth rate will slow to about 1% this year, but he believes that the economy is expected to rebound in 2026.