The August jobs report fell short of expectations, adding 142,000 jobs compared to the 165,000 economists had forecast. EY Senior Economist Lydia Boussour joins Wealth! to discuss her economic outlook in light of this report.

Boussour observes that while the jobs data indicates a softening labor market, it's not "falling off a cliff." She notes that the absence of broad deterioration in the labor market makes a 50 basis point cut by the Federal Reserve unlikely.

"In terms of the size of the rate cuts, we remain in the camp that the Federal Reserve will implement a 25 basis point rate cut and will opt for that gradual approach with a steady pace of decreases throughout the remainder of the year," she tells Yahoo Finance, projecting a total of 125 basis points in cuts for 2025.

Regarding inflation, Boussour highlights the continued progress and the disinflationary trend. She emphasizes, "So really the focus right now is more on the labor market."

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This post was written by Angel Smith