US summer lull yields a 'soft-landing' data trove for Fed
By Howard Schneider
WASHINGTON (Reuters) — Data since the Federal Reserve's last policy meeting has added to the impression the U.S. economy is cooling without cracking, likely bolstering the case against further rate increases even if central bank policymakers are reluctant to call off their fight against inflation any time soon.
Since adjourning their July 25-26 policy meeting, employment reports — including downward revisions to earlier releases — showed job growth slipping from its torrid pandemic-era pace to one more comparable with the strong-but-sustainable labor market seen before the start of the global health crisis.
Though hiring in August was strong by historical standards, with 187,000 jobs added, employment gains over the last three months have averaged just 150,000, the lowest reading since the October-December period in 2019.
The rates at which workers are quitting as well as the pace of hiring also have slipped to near or below pre-pandemic levels, while one statistic closely watched by the Fed — the number of job openings for every unemployed person — tumbled in July to 1.51, the lowest since September 2021.
The downshift marks «a clear cooling of the labor market,» former Boston Fed President Eric Rosengren said in comments posted on messaging platform X, formerly known as Twitter. «If it continues we are likely at the peak of the interest rate cycle.»
The Fed has raised its benchmark overnight interest rate rapidly since March of 2022, but is expected at its Sept. 19-20 meeting to hold it steady in the current 5.25%-5.50% range. New economic projections issued at the end of that gathering will show if policymakers continue to expect an additional rate increase this year, but after the latest jobs data
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