(AURN News) — The Federal Reserve cut interest rates this week by a quarter point, following a quarter-point cut in October. Federal Reserve Chair Jerome Powell said the Fed is still working to meet its goals of maximum employment and stable prices, but he also warned about the direction of the U.S. economy.
“Although important federal government data for the past couple of months have yet to be released, available public- and private-sector data suggest that the outlook for employment and inflation has not changed much since our meeting in October,” Powell said.
“Conditions in the labor market appear to be gradually cooling, and inflation remains somewhat elevated,” he added.
Inflation remains a key economic concern, and the Federal Reserve said its target is still to bring it down to 2%. “In the near term, risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation. There is no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.
For average Americans, Powell also pointed to troubling labor market data.
“Unemployment is now up 3/10 from June through September. Payroll jobs averaging 40,000 per month since April. We think there’s an overstatement in these numbers by about 60,000. So that would be negative 20,000 per month,” Powell said.
“Also, just to point out one other thing, surveys of households and businesses both showed declining supply and demand for workers, so I think you can say that the labor market has continued to cool gradually, maybe just a touch more gradually than we thought,” he added.
In October, AURN News reported how artificial intelligence and its rapid expansion in the labor force were influencing the Federal Reserve’s policy direction. The latest assessment suggests AI continues to weigh on the U.S. workforce as more workers lose their jobs and are replaced by the new tech.
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