American Employers Are About to Slow Hiring, and That's OK

Is it time to start lowering expectations on what constitutes a healthy job market? Since the start of 2013, payrolls have climbed at an average monthly pace of 225,000. And government data out tomorrow is expected to show a similar-sized gain in July, according to forecasters surveyed by Bloomberg.

But as the job market approaches what many economists — including some at the Federal Reserve — believe constitutes full employment, investors, job seekers and central bankers all may need to gradually adjust their sights downward to a slower pace of hiring, economists say. Why? Because continued gains in payrolls at a 200,000-plus monthly pace would fairly quickly push the unemployment rate down to levels that would be too low to sustain without spurring inflation.