Levy Sees Fed Hiking Rates by 2026 End Despite 23,000 July Job Loss
Updated
Updated · kathleenhays.substack.com · Aug 9
Levy Sees Fed Hiking Rates by 2026 End Despite 23,000 July Job Loss
1 articles · Updated · kathleenhays.substack.com · Aug 9
Summary
23,000 jobs were lost in July, but Mickey Levy said the report overstates weakness and still expects the Fed under Kevin Warsh to raise rates by year-end because inflation remains above 2%.
30,000 private-sector jobs were added while a one-time 50,000 drop in local education employment dragged down the headline figure, supporting Levy’s view that the broader economy remains resilient and recession risk is low.
Declining labor-force participation, shrinking labor supply and skills mismatches matter more than one payroll print, he argued, especially as businesses stay in a low-hiring, low-firing mode and immigration curbs slow workforce growth.
6.5% nominal GDP growth and productivity gains that Levy says drive 75%-80% of potential growth point to policy that is still accommodative, even with real wages under pressure and oil lifting headline inflation.
The next test is whether the Fed treats July as noise or a signal when August data arrive before the September meeting, a choice that could define Warsh’s push to return inflation to target.