Powell Warns of Emerging Downside Risks in U.S. Labor Market

Federal Reserve Chair Jerome Powell said the strength of the U.S. labor market is beginning to show cracks, warning that downside risks are "certainly apparent" despite data that still point to overall solidity. Powell told reporters the unemployment rate remains the primary gauge of labor-market health and noted that the level of monthly job gains needed to keep that rate steady—the so-called breakeven number—has fallen. He also linked a slowdown in labor-force growth mainly to immigration policy, adding that the combination of softer labor supply and demand could weigh on employment conditions. The Fed chief said policymakers are monitoring these indicators closely, underscoring that any deterioration in hiring would factor into future monetary decisions.