Employment Research Brief
Job Growth Downshifts to Goldilocks Zone,
Providing Runway for Fed to Pull Off Soft Landing
Last month’s employment report ideal for Fed objectives. Employers added 315,000 personnel to payrolls in August, below the 526,000 jobs created in the previous month, but well above historical averages. The month-over-month hiring slowdown, together with a slight increase to unemployment, lowers the likelihood of a 75-basis-point rate hike at the next Federal Reserve meeting in favor of a smaller margin. The central bank is still likely to raise the overnight lending rate at least one more time this year to bring the target range above 3 percent. Comments from Chairman Jerome Powell at Jackson Hole last month indicate the Fed expects to impose some near-term challenges on the labor market as it pushes interest rates higher in an effort to combat elevated inflation.