Read the highlights of this week’s commentary from Helios:

  • Nonfarm payrolls increased by 187K in July, lower than the consensus estimate of 200K, and the second straight negative surprise after exceeding expectations for over a year.
  • The household survey showed stronger employment, with an increase of 268K jobs, and the unemployment rate fell from 3.6% to 3.5%.
  • Federal Reserve Bank of Atlanta President Raphael Bostic expects the economic slowdown to be orderly, and there will be no need to raise interest rates further. Bostic believes that the Fed can achieve its 2% inflation target by maintaining rates at their current level for an extended period and that monetary policy will remain restrictive well into 2024.
  • Fitch downgraded the US’ credit rating from AAA to AA+, the first downgrade in over a decade when S&P downgraded the US in 2011. Fitch cited the forecasted fiscal situation over the next three years, overall debt levels, and the “erosion of governance…over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.” See our Rapid Reaction on Wednesday for more.

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