US Fed Reserve says labour market balanced, points to immigration slowdown

A sharp stepdown in immigration has led the supply of workers to grow more slowly, helping to keep the labor market in balance as job growth cools, the Federal Reserve said Friday.

 

“Labor supply has increased less robustly than in previous years, with immigration appearing to have slowed sharply since the middle of last year and the labor force participation rate having declined a bit,” the Fed said in its semi-annual report to Congress on monetary policy, released on Friday. 

 

The report described the labor market as being in “solid shape,” with jobs growing at a “moderate” pace and the unemployment rate low. “As labour demand has gradually eased over the past few years, a variety of measures suggest the labor market has moved into balance and is now less tight than just before the pandemic,” the report said. 

 

 

The benefits appear to be broad-based, with the unemployment rates remaining stable over the past year and at relatively low levels for different groups of workers based on age, education, sex and racial and ethnic groups, the Fed said. 

 

The report reiterated the message from Fed Chair Jerome Powell and other officials that monetary policy is well positioned for policymakers to wait for more clarity on the economic outlook. Officials left interest rates unchanged Wednesday, as they have all year, as they seek to learn more about how President Donald Trump’s policies will affect the economy.     (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)