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WASHINGTON (AP) — Data available during the recent U.S. government shutdown show the job market is nearing a standstill, with state unemployment claims rising slightly, the number of layoffs rising, and no evidence of wage pressure building, facts that warrant another quarter-percent interest rate cut at the U.S. central bank’s meeting next month, Federal Reserve Governor Christopher Waller said Monday.
“The labor market is still weak and nearing stagnation,” Waller said in comments prepared for delivery to an economist group in London. Meanwhile, inflation, after the potentially temporary impact of tariffs is removed, is “relatively close” to the Fed’s 2% target, Waller said, while economic growth is likely to slow.
“I’m not concerned about inflation rising or inflation expectations rising significantly,” Waller said. “My focus is on the labor market, and after months of weakness, it is unlikely that the September jobs report this weekend or any other data over the next few weeks will change my view that another cut is appropriate” when the Fed meets Dec. 9-10.
The 43-day federal government shutdown caused delays in the release of key economic data, including the September jobs report that was scheduled to be released on Thursday.
Waller, a candidate to replace Fed Chairman Jerome Powell in the central bank’s top job next year, said the central bank is not, as some of his colleagues have said, “in a fog” that requires delaying rate cuts until there is more clarity.
“We have a wealth of private and some public sector data that provides an incomplete but completely actionable picture of the U.S. economy,” he said, including information from private sources like payroll processor ADP, state government unemployment claims and surveys by groups like the Conference Board and the University of Michigan.
He said a decline in consumer sentiment and the strain on households whose budgets are stretched by housing and other major costs point to slower economic growth.
“I am concerned about the impact that restrictive monetary policy is having on the economy, particularly how it is affecting low- and moderate-income consumers,” Waller said. “The December cut will provide additional insurance against an acceleration in labor market weakness and move policy toward a more neutral setting.”
This article was generated from an automated news agency feed without any modifications to the text.
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