MNI BRIEF: Fed's Bostic Sees Increased Risk To Labor Goal

Federal Reserve Bank of Atlanta President Raphael Bostic said Friday the weak July jobs report suggests risks to U.S. economic growth and the health of the labor market may be as great as the threat to inflation, but more data is needed before he will revise higher his view for one rate cut this year.

The three-month average pace of U.S. hiring has fallen to just 35,000 through July, after the Bureau of Labor Statistics significantly revised lower previous months of payrolls growth.          

"We've now seen with these revisions a real clear signal that employment markets are slowing down in a significant way, I would say, off of pretty solid levels before," he told CNBC. "Now the test we have is really to figure out, to what extent is this slowdown likely to persist and get us into a more troublesome position? But we don't know that now, and that's something that I'll be working on over the next two months." 

"If it looks like the labor market is weakening in a sustained way, such that the risks on that side have increased to be greater than the risks on the inflation side, then I'd be open to increasing the number of cuts this year. I don't see that right now, with inflation still further from its target than employment is from it, but we will just have to watch and see how things evolve over the next several months." (See: MNI INTERVIEW: Inflation Could Stifle 2025 Fed Cuts-George)