US labor market shows signs of cooling with slower job growth

According to Matt Schoeppner, senior economist at U.S. Bank, the primary stabilizing factor is the continued low rate of layoffs. He explained that as long as job losses are contained, the labor market can maintain a stable, albeit subdued, equilibrium. This stability, however, is driven more by limited separations than by robust hiring. Schoeppner also noted that the combination of low unemployment and slower job growth reflects a pullback in both labor demand and supply, with slower labor-force growth meaning the economy requires fewer job gains to keep unemployment stable.

Recent data indicate that labor market conditions may be stabilizing. Payroll growth has averaged 70,000 over the past three months, and prior months' figures have been revised upward. Beth Ann Bovino, chief economist at U.S. Bank, pointed out that businesses are increasingly hiring temporary workers and maintaining hours for existing employees, suggesting a preservation of workforce capacity despite slower overall hiring.