By Howard Schneider and Ann Saphir
CHICAGO/PALO ALTO, California- Federal Reserve officials appear on track to cut interest rates this month after data showed the US labor market remained strong but continued to cool in November, even as debate emerged over a possible pause to rate cuts in the new year.
US employers added 227,000 jobs last month, a rebound from a hurricane-impacted slowdown in October, but the unemployment rate ticked up to 4.2 percent, the Labor Department’s monthly employment report showed on Friday.
Over the last half-year average monthly job gains are below 150,000, short of what some policymakers feel is needed to provide enough work to match a growing population, but nothing like the collapse Fed policymakers worried could happen when they began cutting interest rates a few months ago.
A number of Fed policymakers speaking on Friday said they saw rates continuing to come down, while injecting a note of caution on the pace.
San Francisco Fed President Mary Daly said the fresh figures show the labor market is in a good position. And while she indicated no discomfort with another rate cut this month, she said that once the policy rate is closer to where it will settle, she would take “a more thoughtful and cautious approach” on further rate cuts. Daly has previously said she views 3 percent as where short-term borrowing costs may need to end up.
Chicago Fed President Austan Goolsbee also said he expects that by next year “rates are going to be a fair bit lower than where they are today,” with the Fed feeling its way to a stopping point for rate cuts.
Beth Hammack, in her first major policy speech since taking the helm of the Cleveland Fed in August, said she too feels rates need to come down over time, but that given still-elevated inflation and a healthy labor market, “we are at or near the point where it makes sense to slow the pace of rate reductions.” – Reuters
