Democrats on Friday called on the central bank to cut interest rates now as unemployment continues to soar.
The unemployment rate jumped to 4.3% and payrolls added 114,000 jobs in July, well below the 180,000 that economists had expected.
John Carney, economics editor at Breitbart News, noted that a significant increase in the unemployment rate could signal that the economy may be heading toward a recession.
The unemployment rate of 4.3% is 50 basis points above the lowest three-month average over the past 12 months, a benchmark known as the “thumb rule” that historically signals the start of a recession.
Federal Reserve Chairman Jerome Powell said on Wednesday that while a recession typically occurs after the stimulus package is implemented, a recession is not guaranteed.
“This is not some kind of economic rule that says something has to happen,” Powell said.
Many Democrats who have been calling for the Fed to cut interest rates are demanding that the Fed act now.
Sen. Elizabeth Warren (D-Mass.) wrote:
Fed Chairman Powell made a serious mistake by not lowering interest rates. He has been warned many times that if he waits too long the economy risks hitting rock bottom. The jobs report is a red flag. Powell needs to lower interest rates now, not cancel his summer vacation and wait 6 weeks.
Fed Chairman Powell made a serious error by not lowering interest rates, and he has been warned many times that waiting too long risks putting the economy in a tailspin.
The job data is flashing red.
Powell needs to cancel his summer vacation and cut interest rates now instead of waiting six weeks. https://t.co/PmzEi45Ggi
— Elizabeth Warren (@SenWarren) August 2, 2024
“Now seems a good time to remind people that more prime-age adults are employed than at any time in history. There’s no need to panic yet, but the Fed still needs to cut interest rates. That’s all,” wrote Democrats on the Joint Economic Committee, chaired by Sen. Martin Heinrich (D-N.M.).
It seems like a good time to remind people that now is the time when more prime-age adults are employed than at any other time in history.
There’s no need to panic just yet, but the Fed still needs to cut interest rates. That’s it. https://t.co/1TtBufAJRw
— Joint Economic Committee Democrats (@JECDems) August 2, 2024
“Inflation is falling. There’s no reason to keep interest rates artificially high. It’s time for the Fed to lower interest rates,” Heinrich argued Monday.
Inflation is falling. There is no reason to keep interest rates artificially high. It is time for the Fed to lower interest rates. pic.twitter.com/c1qTxcAKVR
— Martin Heinrich (@SenatorHeinrich) July 29, 2024
Leftists have been clamoring for the Fed to cut interest rates, believing that making it easier to fund green energy development would help the country “fight the climate crisis.”
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter. Sean Moran 3.
