The job market is not weak, the economy may be too strong for policy recalibration

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic noted on Tuesday that despite a recent slowdown in the US labor market, the labor market itself shows no signs of weakness, further stressing that despite significant progress of inflation, overall price figures have not yet reached target levels.

Key highlights

The job market has slowed, but it’s not slow or weak.

Monthly job creation is above what is needed to explain population growth.

The economy is close to the Fed’s targets and getting closer.

The inflation rate is still well above 2%.

Still focused on inflation, but the labor market is also prominent.

There is a risk that the economy is too strong and could prevent policy recalibration.

Companies say consumers have become much more price-sensitive, reducing their ability to raise prices.

Hurricanes Helene and Milton may have significant implications for the economy over the next three to six months.

Changes in supply chains mean that business cost structures will also change, something the Fed will need to understand.