Fed's Schmid Sees Balanced U.S. Worker Supply Despite Immigration Drop; Inflation Near 3%, Job Market Faces Stagnation

Federal Reserve official Schmid has indicated that the supply and demand for workers in the U.S. labor market appear to be balanced despite the impacts of reduced immigration. Schmid noted that the final phase of inflation remains challenging, with inflation likely closer to 3% than 2%, and emphasized that more data is needed through September to assess the situation fully. Meanwhile, reports from the Wall Street Journal highlight that although demand for workers has cooled, the unemployment rate has remained steady. This stability is attributed to a sharp decline in immigration, which has led to an abrupt slowdown in labor supply. The job market is experiencing notable changes, including a 'no-hire, no-fire' freeze and shifts described as the transition from a 'Big Stay' period, signaling a stagnant job market that poses rising risks to the U.S. economy.