According to PANews, the Royal Bank of Canada has reported an unexpected downturn in the U.S. labor market at the start of the third quarter. July's non-farm payroll data indicated a significant slowdown in labor market conditions, which have been gradually deteriorating over the past year. The unemployment rate rose from 3.4% in April 2023 to 3.9% in April, and then increased to 4.3% over the next three months.During this week's Federal Reserve meeting press conference, Fed Chairman Jerome Powell continued to describe the current labor market weakness as a normalization from overheated conditions. He emphasized that if the labor market weakens unexpectedly, the Federal Reserve is prepared to respond accordingly. The Royal Bank of Canada still expects the Federal Reserve to cut interest rates at its next meeting in September and believes the risk of further rate cuts for the remainder of the year leans towards more rather than fewer.
