Federal Reserve officials have been looking for further evidence that their interest rate increases over the past two years are weighing on the economy and job market, and Friday’s employment report roundly provided that signal.
That moderation came as job gains slowed, the unemployment rate ticked up slightly and average weekly hours nudged down.
The overall picture was one of a labor market that remains solid but is gradually slowing — exactly what officials at the Fed have been looking for.
Central bankers generally embrace a strong job market: One of their two mandates from Congress is to foster maximum employment.
But when inflation is rapid, like it has been since 2021, officials worry that a hot labor market could help to keep price gains elevated.
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