{"id":175018,"date":"2025-08-25T18:51:14","date_gmt":"2025-08-25T18:51:14","guid":{"rendered":"https:\/\/www.europesays.com\/us\/175018\/"},"modified":"2025-08-25T18:51:14","modified_gmt":"2025-08-25T18:51:14","slug":"the-fed-finally-responds-to-a-sputtering-labor-market","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/175018\/","title":{"rendered":"The Fed finally responds to a sputtering labor market"},"content":{"rendered":"<ul class=\"list |  list_unstyled list_counter_reset unordered font_size_18\">\n<li class=\"list_counter_increment flex align_items_base\">Burlington\u2019s Keurig Dr Pepper <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/business\/keurig-dr-pepper-acquire-peets\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/business\/keurig-dr-pepper-acquire-peets\/?s_campaign=trendlines:newsletter\">agreed to buy<\/a> the owner of Peet\u2019s Coffee for $18 billion and plans to spin off its coffee brands into a separate public company.<\/li>\n<li class=\"list_counter_increment flex align_items_base\">President Trump\u2019s <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/metro\/trump-administration-halts-revolution-wind-ri\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/metro\/trump-administration-halts-revolution-wind-ri\/?s_campaign=trendlines:newsletter\">halt of the nearly complete Revolution Wind project<\/a> has far-reaching implications for Rhode Island.<\/li>\n<li class=\"list_counter_increment flex align_items_base\">Applegreen has sent <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/business\/applegreen-global-partners-service-plazas\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">a cease-and-desist letter<\/a> to Global Partners, saying the company should stop making false statements about its rival for the redevelopment lease for Massachusetts\u2019 18 highway service plazas.<\/li>\n<\/ul>\n<p class=\"paragraph | gutter_20_0\">What\u2019s up with jobs?<\/p>\n<p class=\"paragraph | gutter_20_0\">With Labor Day approaching, it\u2019s a fair question \u2014 but not an easy one, even for the experts.<\/p>\n<p class=\"paragraph | gutter_20_0\"><b>The latest: <\/b>\u201cWhile the labor market appears to be in balance, it\u2019s a curious kind of balance,\u201d Federal Reserve Chair Jerome Powell said Friday <a href=\"https:\/\/www.federalreserve.gov\/newsevents\/speech\/powell20250822a.htm\" target=\"_blank\" rel=\"noopener\">in his most anticipated speech<\/a> of the year. <\/p>\n<p class=\"paragraph | gutter_20_0\">While the jobless rate edged up last month, it remained low by historic standards. That\u2019s because fewer people are entering the labor force, muting the impact of slower hiring, Powell said.<\/p>\n<p class=\"paragraph | gutter_20_0\">\u201cThis unusual situation,\u201d he warned, could lead to \u201csharply higher layoffs and rising unemployment\u201d if employers pull back hiring even further.<\/p>\n<p class=\"paragraph | gutter_20_0\">To support the labor market, the Fed chief <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/22\/nation\/federal-reserve-interest-rates-jerome-powell-jackson-hole-speech\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">opened the door to lowering interest rates<\/a> as soon as September \u2014 though a sudden inflation spike could derail such a move.<\/p>\n<p class=\"paragraph | gutter_20_0\">It would be the first drop in Fed borrowing costs since December, and investors applauded by sending the Standard &amp; Poor\u2019s 500 index to its biggest one-day gain since May.<\/p>\n<p><img decoding=\"async\" id=\"img-44WADHQUH4JQPYDOF2RD7OHEKM-image\" alt=\"Fed Chair Jerome Powell spoke last week at a conference in Jackson Hole, Wyo., where he signaled the central bank would soon cut interest rates.\" class=\"height_a width_full invisible width_full--mobile width_full--tablet-only\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/08\/44WADHQUH4JQPYDOF2RD7OHEKM.jpg\"  loading=\"lazy\"\/>Fed Chair Jerome Powell spoke last week at a conference in Jackson Hole, Wyo., where he signaled the central bank would soon cut interest rates.David Paul Morris\/Bloomberg<\/p>\n<p class=\"paragraph | gutter_20_0\"><b>The local angle: <\/b>A rate cut would be especially welcome in Massachusetts, where the job market <a href=\"https:\/\/www.bostonglobe.com\/2024\/12\/23\/business\/massachusetts-job-growth-slows\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">began losing steam<\/a> long before the nation overall. <\/p>\n<p class=\"paragraph | gutter_20_0\">The <a href=\"https:\/\/www.mass.gov\/news\/unemployment-unchanged-in-july-2700-more-massachusetts-residents-gained-employment\" target=\"_blank\" rel=\"noopener\">state\u2019s unemployment rate<\/a> climbed from 4.1 percent at the end of last year to 4.8 percent in July. The national rate ticked up just 0.1 percentage point to 4.2 percent over the same period.<\/p>\n<p class=\"paragraph | gutter_20_0\">Why?<\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/fred.stlouisfed.org\/series\/MALF\" target=\"_blank\" rel=\"noopener\">The pool of available workers has expanded<\/a> here modestly faster than across the nation, as more Massachusetts residents start searching for a job. The US labor force actually declined over the past three months, a trend Powell attributed to President Trump\u2019s tighter immigration policies.<\/p>\n<p class=\"paragraph | gutter_20_0\">Meanwhile, local hiring has sputtered. Employer payrolls are up just 0.2 percent over the past year, compared with a 1 percent increase nationally.<\/p>\n<p class=\"paragraph | gutter_20_0\"><b>Step back: <\/b>Massachusetts\u2019 struggles aren\u2019t new.<\/p>\n<p class=\"paragraph | gutter_20_0\">Job creation here has trailed the nation for much of this century \u2014 and we\u2019ve heard the reasons countless times.<\/p>\n<p class=\"paragraph | gutter_20_0\">The population is aging. The loss of residents to other states has accelerated. Aggravating the demographic challenge: high taxes and business costs, unaffordable housing, bad traffic, and cold winters \u2014 all of which have boosted the appeal of Sun Belt states.<\/p>\n<p class=\"paragraph | gutter_20_0\"><b>But: <\/b>The rest of the nation is now getting squeezed \u2014 and <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/18\/newsletters\/trump-economy-uncertainty\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">Trump\u2019s policies<\/a> are at least partly to blame.<\/p>\n<p class=\"paragraph | gutter_20_0\">As my colleague <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/newsletters\/job-market-fed-interest-rates\/mailto:omar.mohammed@globe.com\" target=\"_blank\" rel=\"noopener\">Omar Mohammed<\/a> <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/20\/metro\/tough-jobs-market-unemployment-massachusetts\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">explained last week<\/a>, local employers are hunkering down amid tariffs, federal cuts to medical research and health care spending, and the administration\u2019s attack on higher education and <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/22\/nation\/trump-order-wind-farm\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">opposition to offshore wind<\/a> and other green tech.<\/p>\n<p class=\"paragraph | gutter_20_0\">Powell cautioned that changes in taxes, government spending, and regulation may impact the economy. <\/p>\n<p class=\"paragraph | gutter_20_0\">\u201cThere is significant uncertainty about where all of these policies will eventually settle and what their lasting effects on the economy will be,\u201d he said.<\/p>\n<p class=\"paragraph | gutter_20_0\"><b>Zoom in: <\/b>Local job losses over the past year have been concentrated in a few important sectors:<\/p>\n<ul class=\"list |  list_unstyled list_counter_reset unordered font_size_18\">\n<li class=\"list_counter_increment flex align_items_base\">Professional and business services \u2014 the white-collar army of lawyers, accountants, analysts, and managers \u2014 has shed 9,400 jobs (1.5 percent of the total).<\/li>\n<li class=\"list_counter_increment flex align_items_base\">Education services \u2014 including colleges and universities \u2014 is down 4,800 jobs (2.5 percent).<\/li>\n<li class=\"list_counter_increment flex align_items_base\">Leisure and hospitality and construction are treading water, while retail, wholesale, and manufacturing have seen modest losses.<\/li>\n<\/ul>\n<p class=\"paragraph | gutter_20_0\">A rare bright spot: health care and social assistance added 13,500 jobs over the past year, a gain of 2.1 percent, to meet increased demand for services. But with health systems\u2019 budgets facing government spending cuts, those gains may not last.<\/p>\n<p class=\"paragraph | gutter_20_0\">The finance sector, including banks and mutual funds, has grown by 2,500 jobs (1.1 percent) amid a stock market rally.<\/p>\n<p class=\"paragraph | gutter_20_0\"><b>Final thought: <\/b>The economy is slowing, but a recession isn\u2019t inevitable.<\/p>\n<p class=\"paragraph | gutter_20_0\">Not a few people \u2014 including two Fed governors \u2014 argue that the Fed should have already cut rates. They have a point.<\/p>\n<p class=\"paragraph | gutter_20_0\">Regardless, Powell is now on board.<\/p>\n<p class=\"paragraph | gutter_20_0\">The scope of the rate cuts will depend on how severely the job market weakens and how much tariffs worsen inflation.<\/p>\n<p class=\"paragraph | gutter_20_0\">The most recent <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/12\/business\/consumer-prices-report\/\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/2025\/08\/12\/business\/consumer-prices-report\/\">Consumer Price Index report<\/a> showed prices for goods ticking up as import taxes kick in. Further increases could force the Fed into a bind because higher rates are its only weapon against surging prices. <\/p>\n<p class=\"paragraph | gutter_20_0\">\u201cWe\u2019re getting some cross-currents and it\u2019s in a difficult environment,\u201d Chicago Fed President Austan Goolsbee told Bloomberg last week. \u201cI always say the hardest job the central bank has is to get the timing right at moments of transition.\u201d<\/p>\n<p class=\"paragraph | gutter_20_0\">The stakes are high. Millions of jobs are on the line.<\/p>\n<p class=\"paragraph | gutter_20_0\">\u201cI said, I think it would be good having the United States as your partner. He agreed.\u201d<\/p>\n<p class=\"paragraph | gutter_20_0\">\u2014 President Trump, on his deal with Intel CEO Lip Bu Tan for the US government to <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/22\/business\/trump-intel-stake\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/2025\/08\/22\/business\/trump-intel-stake\/?s_campaign=trendlines:newsletter\">take a 10 equity stake<\/a> in the troubled semiconductor manufacturer.  <\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/22\/business\/south-shore-health-layoffs\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">Invasive procedure<\/a>: South Shore Health laid off 51 employees and said it would eliminate more jobs in coming weeks, the latest in a wave of cutbacks by Massachusetts hospitals hit by escalating costs and bracing for federal spending reductions.<\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/metro\/ri-brown-harvard-dei-trump-admissions\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">Put to the test<\/a>: Campus leaders say new admission rules from the Trump administration could derail efforts to balance equity with academic excellence.<\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/business\/universities-ai-administration\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">Brain power<\/a>: While universities contemplate the use of artificial intelligence in the classroom, they are relying on the technology to cut down on operating costs and save staff time.<\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/22\/business\/target-walmart-sales-financial-retail\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">Checking out<\/a>: \u201cThey don\u2019t remember who they are anymore\u201d: Why Target is falling behind Walmart.<\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/21\/metro\/ri-pbs-publics-radio-buyouts-layoffs\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">Filling in a hole<\/a>: Rhode Island\u2019s Ocean State Media is offering buyouts and may resort to layoffs to close a $1.1 million budget gap after Congress eliminated public media funding.<\/p>\n<p class=\"paragraph | gutter_20_0\"><a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/21\/business\/kraft-wu-office-buildings\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">What gives?<\/a> Mayoral challenger Josh Kraft called on Mayor Michelle Wu to address allegations that the city is retaliating against property owners who have sought tax breaks amid falling office building values.<\/p>\n<p class=\"paragraph | gutter_20_0\">\u2014 The stock price decline this year of \u01fersted, the Danish wind power company, whose nearly complete project about 15 miles south of the Rhode Island coast was <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/metro\/trump-administration-halts-revolution-wind-ri\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\">put on hold<\/a> by the Trump administration on Friday.<\/p>\n<p><img decoding=\"async\" id=\"img-DPQN25ITKFEXTHD56NDSHXLLIQ-image\" alt=\"The cottage at 3 North Gully Road was bought by Belichick in 2014.\" class=\"height_a width_full invisible width_full--mobile width_full--tablet-only\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/08\/DPQN25ITKFEXTHD56NDSHXLLIQ.jpg\"  loading=\"lazy\"\/>The cottage at 3 North Gully Road was bought by Belichick in 2014.Town and County of Nantucket<\/p>\n<p class=\"paragraph | gutter_20_0\">I can\u2019t swear Bill Belichick slept there \u2014 <a href=\"https:\/\/www.bostonglobe.com\/2025\/05\/15\/arts\/bill-belichick-girlfriend-jordon-hudson\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/2025\/05\/15\/arts\/bill-belichick-girlfriend-jordon-hudson\/?s_campaign=trendlines:newsletter\">or girlfriend Jordon Hudson<\/a> \u2014 but the former Patriots coach does own the two-bed, two-bath beachfront cottage on Nantucket that has hit the market for $3.895 million.<\/p>\n<p class=\"paragraph | gutter_20_0\">Belichick, who is now running the football show at the University of North Carolina, bought the property in the village of Siasconset for $2.45 million in 2014. <\/p>\n<p class=\"paragraph | gutter_20_0\">As the Globe\u2019s Camilo Fonseca <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/24\/metro\/bill-belichick-nantucket\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/2025\/08\/24\/metro\/bill-belichick-nantucket\/?s_campaign=trendlines:newsletter\">reports<\/a>, Belichick isn\u2019t abandoning Nantucket: He owns several other properties<b> <\/b>there, including<b> <\/b>a<b> <\/b>home across the island on Fair Street he bought last year for $4.8 million.<\/p>\n<p class=\"paragraph | gutter_20_0\">\ud83c\udf82 <a href=\"https:\/\/www.youtube.com\/watch?v=FoRm7jNTKsI\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.youtube.com\/watch?v=FoRm7jNTKsI\">Elvis Costello<\/a> (71) and <a href=\"https:\/\/www.youtube.com\/watch?v=5OpLSWw-L2M\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.youtube.com\/watch?v=5OpLSWw-L2M\">Jeff Tweedy<\/a> (58) of Wilco are both celebrating birthdays today.<\/p>\n<p class=\"paragraph | gutter_20_0\">Thanks for reading. Trendlines will be back on Thursday. <\/p>\n<p class=\"paragraph | gutter_20_0\">\u270d\ud83c\udffc If someone sent you this newsletter, you can <a href=\"https:\/\/www.bostonglobe.com\/newsletters\/trendlines\/?s_campaign=trendlines:newsletter\" target=\"_blank\" rel=\"noopener\" title=\"https:\/\/www.bostonglobe.com\/newsletters\/trendlines\/?s_campaign=trendlines:newsletter\">sign up for your own copy<\/a>.<\/p>\n<p class=\"tagline | font_primary inline_block  margin_top_32\">Larry Edelman can be reached at <a href=\"https:\/\/www.bostonglobe.com\/2025\/08\/25\/newsletters\/job-market-fed-interest-rates\/mailto:larry.edelman@globe.com\" class=\"\" target=\"_blank\" style=\"font-size:inherit;letter-spacing:.5px\" rel=\"noopener\">larry.edelman@globe.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Burlington\u2019s Keurig Dr Pepper agreed to buy the owner of Peet\u2019s Coffee for $18 billion and plans to&hellip;\n","protected":false},"author":3,"featured_media":175019,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,79,2295,67,132,68],"class_list":{"0":"post-175018","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-newsletter","11":"tag-united-states","12":"tag-unitedstates","13":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115090914266616846","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/175018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=175018"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/175018\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/175019"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=175018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=175018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=175018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}