What to look for in Friday's jobs report - CNN

And yet, while the Federal Reserve’s aggressive rate hikes have helped make a dent in inflation and resulted in slower economic activity without stark rises in unemployment, the full effects have yet to come, Fed Chair Jerome Powell warned Wednesday.

“I would say it is a good thing the disinflation we have seen so far has not come at the expense of a weaker labor market,” Powell said in a news conference following the Fed’s first monetary policymaking meeting of the year.

“It’s a very interesting time where it’s really not clear whether what we’re seeing is a welcome, healthy rebalancing of the labor market — or a more worrying stall,” said Julia Pollak, senior economist with ZipRecruiter.

That’s downfrom the January 2021 high of 35 hours when the average workweek balloonedas workers were scarce and other employees were forced to pick up the slack and the extra shifts, Pollak said.

Temporary and contract hiring can show where businesses expand and reducetheir workforce at the margins, said Sarah House, senior economist at Wells Fargo.

While Fed officials have noted that wages don’t appear to be driving inflation, they have expressed concern that a a low participation rate and the imbalance of worker supply and demand could cause pay to rise and, in turn, cause higher prices.