Federal Reserve official Bajin: "Smearing sailing" awaits data guidance, the real labor market is weaker than appearances

Thomas Barkin, president of the Richmond Federal Reserve Bank, has a positive view on the inflation outlook, but also hinted that the labor market may be weaker than current data reflects. Barkin emphasized some data showing a decrease in job postings while the number of unemployment insurance applicants remains stable. "Our surveys indicate that the labor market is slightly weaker than what these numbers show," Barkin said in remarks prepared for an event in Winchester, Virginia on Tuesday. "If you ask businesses how they view the current labor market, they would say 'balanced.' However, when they provide a more detailed description of this 'balance,' it seems to be not quite the case." Barkin mentioned recent announcements of layoffs by major companies such as Amazon.com, Inc., Verizon, and Target Corporation, which "provide additional cautious reasons for the labor market." He added that visits from the Richmond Fed to its contacts have led him to believe that "inflation remains elevated, but is unlikely to rise significantly." Policy Debate After two recent rate cuts, Federal Reserve policymakers are divided on whether to continue cutting rates. This debate is becoming more open, with officials from both sides expressing different views in recent speeches. Some are calling for the Fed to keep rates unchanged, believing that inflation pressures are a greater threat than the rising unemployment rate; while those with a more optimistic view on inflation suggest that the Fed should further cut rates to cushion the labor market. Their judgments have become complicated due to delayed economic data following the end of the federal government shutdown. Barkin described this situation as "trying to steer the ship to shore in pitch darkness while the lighthouse is out." He did not reveal whether he would support another rate cut at the Fed's next meeting on December 9-10, only saying that there is still a lot of information to be observed between now and the meeting. After the event, Barkin expressed agreement with Fed Chairman Jerome Powell's remarks to reporters after the last policy meeting, where Powell said that a rate cut in December is not a certainty. "My perspective is to wait for all information and make the best decision possible," Barkin said. "I believe that you never truly exercise your options until the option expires, so we will make our decision at that point."