US job growth comes up short in possible warning sign for Fed – Times of India

Hiring was weighed down by job losses in the manufacturing, retail trade and information sectors. The education and health care sector — one of the biggest drivers of hiring in the post-pandemic period — boosted headcount by the least since 2022.
Total private-sector payrolls rose by 96,000 on average over the last three months, marking the first time that number fell below 100,000 since the onset of the pandemic.
While the overall unemployment rate edged lower, the so-called underemployment rate — which includes those working part-time for economic reasons and discouraged workers — rose to 7.9%, the highest since October 2021.
The participation rate — the share of the population that is working or looking for work — was unchanged at 62.7%. The rate for workers ages 25-54, also known as prime-age workers, edged lower for the first time since March.
Fed officials also pay close attention to wage growth, as it can help inform expectations for consumer spending — the main engine of the economy. Average hourly earnings rose 3.8% from a year ago. Wages for production and nonsupervisory employees, which covers the majority of workers, advanced 4.1%.
In prepared remarks published after the release of the jobs numbers, New York Fed President John Williams said it is now appropriate for the central bank to reduce interest rates, given progress on lowering inflation and a cooling in the labor market. Fed Governor Christopher Waller and Chicago Fed President Austan Goolsbee are scheduled to speak later Friday.
“There are two roads they could take: Steady 25-basis-point cuts with a commitment to do more if the labor market shows signs of additional cooling — which it did today — or you go in with larger increments and try and downplay the negative signal,” said Laura Rosner-Warburton, a partner at MacroPolicy Perspectives.
“There are two paths. We feel on the fence with this report. It leans toward 50,” she said.