Core Viewpoint - The Federal Reserve official Williams describes the labor market as experiencing a "moderate and gradual cooling," while still remaining robust overall [1] Labor Market Conditions - The unemployment rate slightly increased to 4.2% in July from 4.1% in June, indicating a marginal rise in joblessness [1] - The downward revision of employment growth data for May and June is highlighted as a significant focus of the recent report [1] Interest Rate Outlook - Williams expresses caution regarding the market's high expectations (up to 80%) for a rate cut in September, indicating that he does not fully endorse this outlook [1] - He acknowledges the challenges faced by market participants and policymakers alike in interpreting signals from the economy [1] Economic Growth Projections - The expectation is set for the U.S. economic growth to slow to approximately 1% this year, with a potential recovery anticipated by 2026 [1]

Group 1 - The U.S. labor market added 139,000 jobs in May, with the unemployment rate remaining steady at 4.2% for three consecutive months, which is better than market expectations but below the 12-month average of 149,000 jobs per month [1][2] - The U.S. Labor Department significantly revised down the employment data for March and April, reducing the combined job growth for these two months by 95,000 [1] - Employment growth in May was primarily driven by the healthcare, leisure and hospitality, and social assistance sectors, which collectively added 126,000 jobs [1] Group 2 - The manufacturing and retail sectors, which are closely tied to trade, showed signs of weakness, with manufacturing losing 8,000 jobs and retail shedding 6,500 jobs [1] - The average hourly wage for non-farm employees in May was $36.24, reflecting a month-over-month increase of 0.4% and a year-over-year increase of 3.9%, indicating persistent inflationary pressures [2] - The cautious sentiment surrounding the May employment data reflects businesses' uncertainty regarding trade policies and economic growth [2]

Core Viewpoint - The Singapore Overseas Chinese Bank predicts a significant slowdown in the US economic growth to 1.4% for this year, with a projected increase of 2.8% in 2024 [1] Economic Outlook - The bank's investment strategy managing director, Vasu Menon, highlights the uncertainty surrounding Trump's 10% universal tariffs and erratic trade policies, which may impact the US economy and businesses in the coming months [1] - There is considerable economic uncertainty that has weakened confidence in US assets, as indicated by surveys showing a decline in both business and consumer confidence [1] Data Interpretation - Current soft data regarding economic performance raises questions about whether it will translate into significant hard data weakness, potentially leading to an economic recession [1]