Your Evening Briefing: Cooling US Jobs Outlook Suits Fed’s Plans

New US jobs numbers Friday seem to add insult to injury for Team Recession as data show the labor market cooling just enough, adding more support to a possible soft landing for the world’s largest economy. Healthy job and income gains point to an economy capable of weathering any fallout from the Federal Reserve’s rapid interest-rate increases over the past year, which have come close to taming high inflation. That’s also contributing to renewed confidence among consumers, which may bode well for spending and growth. With unemployment again near record-low levels, though, wages rose more than expected.

Two Fed officials say those slower employment gains suggest the labor market is coming into better balance, arguing the central bank may soon need to pivot from raising rates to thinking about how long to hold them at elevated levels. “I expected the economy to slow down in a fairly orderly way,” Atlanta Fed President Raphael Bostic said Friday. The new numbers are “continuing that pace.”