U.S. job market slows, but it's not yet a 'three-alarm fire,' economist says
The U.S. job market is cooling at a worrisome rate but not to an extent that warrants panic — at least, not yet, according to economists.
Their concern lies with the momentum of key labor-market metrics like unemployment, job growth and hiring.
Such barometers, which were historically strong just a year or so ago, have gradually weakened as the Federal Reserve raised interest rates to cool the economy and bring down inflation.
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A recession could result if the labor market keeps throttling back at its current pace, economists said.
«We're still on this trajectory that's not a three-alarm fire right now,» said Nick Bunker, economic research director for North America at the job site Indeed.
But if the decline doesn't level off soon, he said, a soft landing for the economy may not be in the offing: «We're going to land but it's going to land with a crash.»
Employers added 142,000 jobs in August, the Bureau of Labor Statistics reported Friday, a figure that was lower than expected.
The good news: That figure is an increase from the 89,000 jobs added in July. The unemployment rate also fell slightly, to 4.2% from 4.3% in July.
However, several metrics point to «slowing momentum» throughout the labor market, said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist of the White House Council of Economic Advisers under the Biden administration.
The current level of job growth and unemployment «would be fine for the U.S. economy sustained over many months,» he said. «Problem is, other data don't give us confidence we are going to stay there.»
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