Labor Market Cools Further, Fed Rate Hikes May Cease

Slowing jobs growth and cooling wage pressures in the US may give Federal Reserve policymakers renewed confidence that the economy is adjusting from the shock of the pandemic, allowing inflation to ease further without more interest rate rises. The Labor Department report showed nonfarm payrolls increased by 150,000 last month, below the pre-pandemic trend, and hourly earnings rose 4.1% from a year earlier, the smallest increase since June 2021. Bond yields fell, and traders now see only about a 10% chance of a rate hike by January. The Fed is waiting for more confirmation that the economy is coming into better balance after pandemic disruptions, but Powell signaled a further rate hike could yet be in the offing.