CITIC Securities: US July non-farm payrolls data is lower than expected, the Fed is expected to cut interest rates by 25bps in September

According to Jinshi Data, CITIC Securities Research Report pointed out that the number of new non-farm jobs in the United States in July 2024 was lower than expected. The previous value of new non-farm jobs was revised down, the unemployment rate rose, and the wage growth slowed down. Data all show that the US labor market continues to cool down, but the marginal changes are not large in historical data. The unemployment rate of 4.3% is still at a historical low level, and with the increase in labor supply and the influence of weather factors, the data will not be over-interpreted.

CITIC Securities predicts that the non-farm payroll data in July may be out of the Fed's "sweet spot" but not out of the "comfort zone", and "recession trading" does not mean "economic recession". It is expected that the Fed will cut interest rates by 25bps for the first time at the September FOMC meeting, with room for 50-75bps of interest rate cuts throughout the year, and the 10-year US Treasury yield will run in the range of 3.5-4.2% this year.