Fed Meeting Minutes: Some Data Did Not Show a Sharp Deterioration in the Labor Market

On October 9th, the minutes of the Federal Reserve meeting stated that when discussing the labor market, participants noticed that job growth had decelerated and the unemployment rate had increased slightly. Participants believed that the moderate pace of employment gains in recent months could be a reflection of both a decline in labor supply and the growth of labor demand. Participants emphasized that factors such as a reduction in net immigration or changes in the labor force participation rate had weakened labor supply, while the impact of moderate economic growth or increased uncertainty on businesses' hiring decisions might be the reasons for suppressing labor demand. In this context, participants mentioned a series of other indicators that assist in assessing labor market conditions, including the unemployment rate, the job openings-to-unemployed ratio, wage growth, the proportion of the unemployed finding jobs, the quit rate of employees, and the layoff rate. Participants generally believed that the latest readings of these indicators did not indicate a significant deterioration in labor market conditions. However, a few participants thought that recent labor market data (including revisions to previous data and preliminary estimates of nonfarm payroll benchmark revisions) suggested that the period of labor market softness might be longer than previously reported. (FXStreet)