Federal Reserve officials said Wednesday that while there are signs the economy is slowing, it is not quite ready to cut interest rates.
The Federal Open Market Committee said in a statement covering its July meeting that it had left its interest rate unchanged at about 5.5% – which it is now been for a year.
The committee said it would not budge “until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” a line the group has repeated previously.
While still historically low, the U.S. unemployment rate (4.1%) is at its highest level since February 2018.
On Tuesday, the Bureau of Labor Statistics reported that while layoff activity remained subdued in June, the hiring rate in the economy has slowed to a level not seen since 2014.
The percentage of unemployed workers who’ve gone without jobs for 27 weeks or more has increased, with more than 1.5 million workers now in that category.
The Fed acknowledged the changing labor market conditions but said they were not yet alarming.
“Job gains have moderated, and the unemployment rate has moved up but remains low,” it said in the Wednesday statement.
