The Federal Reserve's Meeting Minutes Highlight a 'Stable but Slowing' Labor Market; Clear Signals of a Policy Shift Are Hard to Find in the Short Term

The statement in the Federal Reserve's July meeting minutes that 'the labor market remains robust' accurately summarizes the core characteristics of the current U.S. job market—overall resilience remains unchanged, but local signs of slowing have emerged. This trend may further support the Federal Reserve's cautious observation and refrain from a shift in monetary policy tone.

From the data perspective, the foundation of 'robustness' still exists: the unemployment rate fell to 4.1% in June, remaining at a historically low level; the employment-to-population ratio remains stable, indicating that the overall supply-demand dynamics in the labor market have not fundamentally loosened; although the ratio of job vacancies to unemployed persons has not clearly risen, it remains stable within a narrow range over the past year, suggesting that the demand side for labor has not contracted significantly, and the market's capacity to absorb labor still exists.

However, the signals of 'slowing' cannot be ignored and may receive more attention from the Federal Reserve: on one hand, the increase in private sector employment in June has 'significantly slowed,' and as a core component of the job market, the weakening of hiring in the private sector may imply that businesses have become more cautious about economic prospects, potentially putting pressure on future employment growth momentum; on the other hand, the 12-month average hourly wage growth of 3.7% is 'slightly lower than the same period last year.' The moderate decline in wage growth not only alleviates some inflationary pressures but also indirectly reflects a marginal easing in the tightness of the labor market, resonating with the 'significant slowdown' in private employment.

Overall, the current labor market's 'stable but slowing' condition precisely aligns with the Federal Reserve's previous policy goal of 'balancing inflation and employment'—there have been no 'risk signals' of a significant deterioration in the job market that would require urgent easing measures such as interest rate cuts, nor have there been any 'overheating signals' of wage-inflation spirals that would necessitate the resumption of rate hikes. In the short term, this trend is likely to keep the Federal Reserve in a 'wait-and-see mode,' and the timing of any future policy shift still requires waiting for further verification from more employment and inflation data, while the market must prepare for the expectation management of sustained 'high-pressure stability.' #美联储7月会议纪要