Federal Reserve press conference, 2024-07-31 — Chair Jerome Powell

Question (Victoria Guida, Politico): Hi. Victoria Guida with Politico. On the labor market, I was wondering, how worried are you all about unemployment rising to the point where it triggers the Sahm rule, and would that potentially affect how quickly you cut rates?
Answer: We—so I would just say, the question really is, is one of, are we worried about a sharper downturn in the labor market? So, and the answer is, we’re watching really carefully for that. We’re, we’re aware of that rule, which is really a, you know, a—I would call it a statistical, statistical thing that has happened through history. A “statistical regularity” is what I’d call it. It’s not like an economic rule where it’s telling you something must happen. So, again, what do we see? What are our eyes telling us? We look at—we look at all the things we’re seeing, and what it looks like is a normalizing labor market—again, job creation at a pretty decent level, wages moving up at a strong level but coming down gradually. Job vacancies have come down, but they’re still high by historical standards. So, again, I’ve been through some of the data already, but what we think we’re seeing is, is a normalizing labor market, and we’re watching carefully to see if it—if it turns out to be more. If it starts to show signs that it’s more than that, then we’re well positioned to respond.