Key highlights:

• The rise in the unemployment rate will accelerate the Fed’s easing cycle, which we still expect to start at the September meeting.
• We now expect 100bps of cuts this year (previously 50).
• We pencil in a 50bp cut in September, but a 25bp cut is still possible with two CPIs and one Payrolls ahead of the meeting.
• We continue to expect slower growth through H2, but do not forecast a recession. While the Sahm-rule recession signal has been triggered, the rise in unemployment has not been driven by layoffs to the same extent as in the past.

Find out more in NAB’s US Economic Update (8 August 2024)