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The slowdown in hiring last month confirmed the weakening economic situation in the United States and brought the Federal Reserve back to light, said Darrell Cronk, president of the Wells Fargo Investment Institute.
US employers added fewer jobs than expected last month, according to data from the Department of Labor, which also revised the numbers down for June and July. This, coupled with obvious signs of slowing the manufacturing sector, is likely enough to prompt the Fed to cut its interest rates by 0.25%, Cronk said.
The data is not poor enough to support the 0.5% cut this month, which most investors demand, he added. But it would be a mistake if the central bank did not give rise to further cuts later this year.
"The Fed just needs to do it faster to stay still in the face of the world's central banks soften and lower rates," said Cronk.
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