Federal Reserve Chairman Jerome Powell and his colleagues at the central bank are keenly aware that the labor market is weakening.
“By many measures, the labor market is still strong, but it has really cooled,” Powell said at an economic conference in Nashville, Tennessee, earlier this week. “If you are unemployed now, it will be harder to find a job than it was two years ago when the job market was very tight.”
At the same time, Powell and other Fed officials have said they don’t want to see the labor market weaken any more than it has been, which is why most of them voted for a half-point cut in interest rates last month versus the usual quarter. Cut point.
Fed Governor Michelle Bowman, who favored a quarter-point cut at the last meeting, said the unemployment rate, which rose from 3.7% at the start of this year to 4.2% as of August, “largely reflects weak hiring, with job seekers entering… work or income. It takes longer to return to the labor market to find work, while layoffs remain low.
But there’s another contributing factor: “a mismatch between the skills of new workers and the jobs available,” Bowman said at a banking conference in Charleston, South Carolina, earlier this week. In other words, people looking for work are unable to find jobs because they do not have the qualifications that employers look for in candidates to fill open positions.
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