Fed's Hammack: Job market is still healthy and in balance but should be watched

In an interview with Bloomberg TV on Friday, Federal Reserve Bank of Cleveland President Beth Hammack noted that the July jobs data was disappointing, per Reuters.

Earlier in the day, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls rose by 73,000 in July, missing the market expectation of 110,000. Additionally, noted that the May NFP increase was revised down by 125,000 and the change for June was revised down by 133,000.

"With these revisions, employment in May and June combined is 258,000 lower than previously reported," the BLS said in its press release.

Key takeaways

"Job market bears watching closely."

"Job market is still healthy and in balance but should be watched."

"Confident FOMC decision was the right one."

"Fed is still seeing pressure on inflation side of mandate."

"Inflation is still influencing economic decisions."

"Right now, Fed is missing much more on inflation side relative to jobs mandate."

"Businesses have been dealing with high uncertainty."

"Expecting to see inflation numbers tick up on tariffs."

"Expecting to see tariff pass-through to prices."

"Expecting to see job market weaken into end of year."

"Fed policy is a little bit restrictive, not far from neutral."

"There's a lot more data to come before September meeting."

"Now is a really tricky time for setting monetary policy."

"Enormous respect for Fed Chair Powell."

"Data will drive any thinking about monetary policy votes."

"There is recognition for importance of central bank independence."

Market reaction

The US Dollar Index struggles to stage a rebound following these comments. At the time of press, the USD Index was down 1.2% on the day at 98.85.

Hammack's comments received a neutral/hawkish score of 6.0 by FXStreet Fed Speech Tracker. Meanwhile, FXStreet Fed Sentiment Index remains in hawkish territory slightly below 120.