The U.S. economy is showing signs of a cooling labor market, even as official data releases face delays, Federal Reserve Chair Jerome Powell indicated. Speaking at the National Association of Business Economists (NABE) conference, where he received the Adam Smith Award, Powell highlighted a consistent trend of softening employment conditions and inflation pressures, a situation potentially amplified by broader economic uncertainties.
Powell’s remarks pointed to a deceleration in payroll growth, a trend he attributed partly to a slowdown in labor force expansion. This reduced growth is likely connected to decreased immigration and a lower labor force participation rate. He further explained that in this changing labor landscape, the risks to employment appear to be increasing, suggesting a shift toward a less dynamic job market.
While acknowledging that official employment figures for September have been postponed, Powell noted that available indicators suggest a consistent pattern of low layoffs and hiring. This observation is supported by a continued decline in both consumer perceptions of job availability and employer assessments of hiring difficulty. These trends collectively depict a labor market undergoing a significant, though gradual, adjustment.
Persistent inflationary pressures, influenced by tariff-related policies, also remain a concern. Powell’s commentary implies that the interaction between these trade policies and labor market dynamics is contributing to the ongoing economic environment that the Federal Reserve is closely monitoring. The delayed release of crucial jobs and inflation data underscores the challenges in real-time economic assessment, yet the underlying trends, as perceived through available evidence, suggest a moderation in market vigor.
Michael Carter holds a BA in Economics from the University of Chicago and is a CFA charterholder. With over a decade of experience at top financial publications, he specializes in equity markets, mergers & acquisitions, and macroeconomic trends, delivering clear, data-driven insights that help readers navigate complex market movements.