Charting the Global Economy: Weak Jobs, Steady Inflation Seal Fed Rate Cut

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(Bloomberg) — A record downward revision to annual US job growth, paired with no surprises in the latest inflation data, sealed the deal for the Federal Reserve to cut interest rates next week.

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While traders are betting the US central bank will embark on a series of reductions, they concluded that the European Central Bank is done lowering borrowing costs after staying on hold for a second meeting. ECB policymakers offered no guidance on future steps, continuing to stress that they’ll act one meeting at a time based on incoming data.

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Meantime, France’s political crisis is eroding an otherwise solid economy, leaving the country trailing the recovery in the rest of Europe.

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Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

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US

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US job growth was far less robust in the year through March than previously reported, adding to mounting pressure on the Federal Reserve to lower interest rates. The number of workers on payrolls will likely be revised down by a record 911,000, or 0.6%, according to the government’s preliminary benchmark revision.

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Underlying US inflation rose as expected in August. Goods prices, excluding food and energy, accelerated 0.3%, matching the biggest climb since May 2023. That reflected increases in new and used cars, apparel and appliances, which some economists pointed out as possible impacts of tariffs. But analysts were generally divided as to how much of a role the duties played in the report, with others more focused on surges in travel-related services like airfares and hotel stays.

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A third of high-level roles at the Bureau of Labor Statistics — which produces marquee numbers on US jobs and inflation — are vacant, according to its website. While the commissioner role has been temporarily filled, a range of other leadership positions that oversee various aspects of employment statistics and regional field operations sit empty.

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Tricolor Holdings Inc., which built its business selling used cars and making loans to low-income and undocumented immigrants, filed for bankruptcy Wednesday, potentially saddling major financial institutions with losses and leading authorities to probe allegations of fraud. While some of its circumstances are specific, they also reflect broader pain for lower-income borrowers — and, increasingly, wealthier Americans — as the economy cools.

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Europe

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The latest forecasts from the French national statistics agency Insee show growth of just 0.8% in 2025 compared to 1.4% in the rest of the euro area, ending two years of French out-performance. After the second government collapse in less than a year earlier this week, the new prime minister, Sebastien Lecornu, is facing mass protests over budget policy as he tries to build parliamentary support for cuts. The upheaval has again spooked investors, sparking selloffs of French assets that are driving up government borrowing costs compared to peers.