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Fed officials flag weak job gains and uncertainty in SEP outlook
Summary
During the post‑statement press conference, Chair Powell and reporters focused on persistently low job creation, a 4.4% unemployment rate, and why many SEP participants still show a bias to cut rates despite elevated core inflation. Powell said forecasts reflect differing individual views and emphasized data dependence.
A key takeaway from the FOMC press conference was concern among officials about weak job creation even as the unemployment rate remained near 4.4%. Chair Powell noted that job gains have remained low and that a portion of the slowing stems from a decline in labor‑force growth tied to lower immigration and participation.
Powell said that when accounting for overcounting and recent revisions, private‑sector job creation has been near zero over recent months, which several participants view as a downside risk. “If you adjust what has been the trend job creation over the past six months... there's zero net job creation in the private sector,” he said, emphasizing the committee’s caution about downside labor‑market risks.
Reporters also pressed why the SEP still shows a bias toward rate cuts for some participants despite upward revisions to inflation forecasts. Powell explained that the SEP reflects 19 individual submissions; while the median projection was unchanged, several people reduced the number of expected cuts, and each participant writes down a path conditional on their assessment of the outlook. He said the committee will not precommit to a path and will act meeting by meeting based on incoming data.
On the February payrolls report, Powell noted factors such as weather and a strike that together account for about 80,000 of the negative effect on the headline number, adding that combined with other indicators the labor market shows stability but little job‑creation momentum. He said the Fed is monitoring both sides of its dual mandate and highlighted that the current environment presents a delicate balance between risks to employment and upside risks to inflation.
Powell concluded that staff and officials will watch upcoming labor‑market indicators closely as they weigh the timing and extent of any future policy easing or tightening.
