Fed says US labor market shows 'signs of cooling'

By Ovunc Kutlu

ISTANBUL (AA) - The US Federal Reserve said labor market in the country shows some "signs of cooling" as rising uncertainty in the economy has forced some businesses to adopt a more cautious approach.

"While employment has continued to increase, on net, the pace of hiring has slowed slightly," the central bank said Wednesday in its Beige Book, which gathers information on current economic conditions from the Fed's twelve districts across the nation.

Although businesses in the construction, transportation and finance sectors reported a significant decline in employment in recent weeks, layoffs have generally remained concentrated in large companies, it added.

The US economy added only 236,000 jobs in March, the lowest since December 2020, while that figure came in at 253,000 for April, indicating that the world's biggest economy is slowing down after the Fed's aggressive rate hikes to lower stubbornly high inflation.

The jobs figure for May will be released Friday at 8.30 a.m. EDT.

The Fed stressed in its Beige Book that inflationary pressures have remained persistent, while supply availability continued to improve although it is still constrained.

As for the recent banking crisis, it said "conditions in the broad finance sector continued to worsen. Regional banks reported ongoing tightening in credit conditions and declining loan demand."

"Amid heightened uncertainty, businesses expect little improvement in the months ahead," it added.