• Cleveland Fed President Beth Hammack voices concerns over a significant slowdown in job growth, with average monthly gains plummeting from nearly 300,000 in early 2023 to just 29,000 in recent months.
  • Despite softening conditions, Hammack argues against further interest rate cuts, emphasizing that inflation remains stubbornly above the Fed's 2% target.
  • The labor market's weakness is disproportionately impacting younger workers and Black workers, signaling increasing vulnerability within specific demographic groups.

Federal Reserve President Beth Hammack has sounded a cautious note on the health of the U.S. labor market, pointing to a dramatic deceleration in job creation that has left certain worker groups more exposed. Her comments, which highlight the Fed's tricky balancing act, come as the central bank wrestles with its dual mandate of maximum employment and price stability.

According to recent Bureau of Labor Statistics reports cited by Hammack, average monthly job gains have slowed to a trickle, falling to approximately 29,000 per month for the June-August 2025 period. This marks a stark contrast from the nearly 300,000 jobs added monthly in early 2023. "We are seeing clear signs of softening," Hammack said, though she was quick to note that the overall unemployment rate remains low for now.

The slowdown, however, is not affecting all demographics equally. Data shows unemployment rates are rising more notably for younger workers and Black workers, suggesting the labor market's foundation may be growing more fragile in specific segments. This development has intensified the debate inside the Fed, where some officials are pushing for more rate cuts to bolster employment.

Hammack, however, is firmly in the camp urging continued restraint. She supports maintaining a mildly restrictive monetary policy, directly countering recent Fed rate cuts that were designed to address labor market weakness. Her position is anchored by persistent high inflation, which is projected to remain elevated into 2026.

A key warning sign for Hammack was a recent JOLTS report showing that, for the first time since April 2021, the number of unemployed persons has surpassed job openings. This metric often serves as a leading indicator of labor market stress. Despite this, she noted that strong equity markets and widely available credit are providing supportive financial conditions that should help underpin growth in the near term.

When asked about the Fed's role in addressing the struggles of recent graduates, Hammack pointed to the need for targeted workforce development but clarified that the central bank's primary function is to study and amplify effective programs, not to deliver them directly.

The tension within the Fed reflects a broader global dilemma, with central banks in the UK and EU also grappling with the clash between slowing job growth and persistent wage and inflation pressures. For now, Hammack's message is one of vigilance rather than alarm, watching for further signs of fragility while holding the line against inflation.

Correction: An earlier version of this article misstated the timeframe for the recent JOLTS report. It is the first time since April 2021 that unemployed persons have outnumbered job openings.