{"id":250858,"date":"2025-09-24T06:23:15","date_gmt":"2025-09-24T06:23:15","guid":{"rendered":"https:\/\/www.europesays.com\/us\/250858\/"},"modified":"2025-09-24T06:23:15","modified_gmt":"2025-09-24T06:23:15","slug":"no-risk-free-path-with-inflation-and-cooling-job-market","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/250858\/","title":{"rendered":"‘No risk-free path’ with inflation and cooling job market"},"content":{"rendered":"

The US unemployment rate has ticked up in recent months to its highest level since 2021. Meanwhile, job seekers say it\u2019s taking them longer to find work<\/a> as employers pull back on hiring. In August, the economy created 22,000 jobs<\/a>, a decline from the revised previous month\u2019s 79,000, according to data from the US Labor Department. <\/p>\n

Last week, Powell said that economic activity has moderated amid a slowdown in consumer spending<\/a> and that the job market was cooling off. He described the current labor situation as a \u201clow firing, low hiring environment.\u201d<\/p>\n

On Tuesday, Powell said policymakers faced \u201cno risk-free path\u201d when it comes to rate cuts.<\/p>\n

\u201cNear-term risks to inflation are tilted to the upside and risks to employment to the downside,\u201d Powell said in a speech at an event in Rhode Island. \u201cTwo-sided risks mean that there is no risk-free path.\u201d<\/p>\n

The central bank chief said that hiring slowed down considerably over the summer, averaging 29,000 per month over the past three months \u2014 below the \u201cbreakeven\u201d rate needed to hold the unemployment rate constant.<\/p>\n

\u201cIt feels like companies are just, they\u2019ve kind of stop hiring, they\u2019re slowing down their hiring because they want to see how this all shakes out,\u201d he said. \u201cWe are having very important changes to economic policy in the United States, and companies and people are wondering how\u2019s that going to work out.\u201d<\/p>\n

As demand for hiring from employers is declining, the job market is also grappling with a drop in the supply of workers amid tough immigration policies instituted by the Trump administration. <\/p>\n

\u201cImmigration was at a very high level for two or three years before this year. And now, immigration has really gone close to zero and immigration is not really contributing to the labor force growth now, whereas it\u2019s been most of what the labor force growth was,\u201d he said. \u201cSo at the same time, you got declining demand and also declining supply of workers.\u201d <\/p>\n

Part of the economic policy changes involve trade. The Trump administration has raised tariffs on imports into the United States, which some economists worry might lead to a rise in prices<\/a>.<\/p>\n

Powell said the federal government was collecting revenue at a yearly pace of about $300 billion or $400 billion from tariffs. At the moment, retailers and importers are carrying the bulk of the tariff costs, and they are thus far not passing all of that increase to consumers.<\/p>\n

\u201cSo the actual effects on inflation have been quite modest so far. It\u2019s a small amount,\u201d he said. \u201cBut it is something that has been driving up inflation a bit. And the question is, are companies, are they going to eventually be able to pass that stuff through, and then that might drive inflation up a little higher.\u201d<\/p>\n

He said that the impact on inflation from tariffs could be a \u201cone-time\u201d shift that could take time to fully show up in the economy.<\/p>\n

\u201cA one-time increase does not mean all at once,\u201d he said. \u201cTariff increases will likely take some time to work their way through supply chains. As a result, this one-time increase in the price level will likely be spread over several quarters and show up as somewhat higher inflation during that period.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The US unemployment rate has ticked up in recent months to its highest level since 2021. Meanwhile, job…\n","protected":false},"author":3,"featured_media":250859,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[72752,3992,8015,64,81,22703,79,1597,454,56506,132842,47585,80,2737,74053,14230,72753,47589,67,586,132,68,2969],"class_list":{"0":"post-250858","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-2025uspolitics","9":"tag-americas","10":"tag-american","11":"tag-business","12":"tag-business-news","13":"tag-central-bank","14":"tag-economy","15":"tag-federal-reserve","16":"tag-government","17":"tag-government-news","18":"tag-macro-economics","19":"tag-north-american","20":"tag-politics","21":"tag-rhode-island","22":"tag-the-federal-reserve","23":"tag-u-s-economy","24":"tag-u-s-government","25":"tag-u-s-a","26":"tag-united-states","27":"tag-united-states-of-america","28":"tag-unitedstates","29":"tag-us","30":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115257842299083093","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/250858","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=250858"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/250858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/250859"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=250858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=250858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=250858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}