The latest dismal US jobs report has raised the specter of stagflation even as it solidifies the case for the Federal Reserve to cut interest rates next week, analysts said.
The report comes after analysts — and some Fed officials — for months have debated whether the central bank has waited too long to cut rates, risking a slowdown.
Health care and artificial intelligence have propped up the economy, but the new report showed how much other sectors have suffered: It “screams impending recession,” journalist Derek Thompson wrote.
The economy is “flashing yellow,” a former labor official told the Financial Times, posing a political challenge to US President Donald Trump, who campaigned on bringing costs down.
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