US economic data shows conflicting signals, Federal Reserve faces policy dilemma

According to reports on November 24, the current economic performance in the United States presents a confusing and contradictory pattern, which puts policymakers in an unprecedented dilemma—they must control inflation while maintaining stability in the labor market.

Contradictions in Economic Data

The latest economic data released by the U.S. Department of Labor shows a strange phenomenon. Between June and August, the U.S. experienced a decline in employment, with an average of only 62,000 new jobs added over the three months ending in September. This figure is significantly below historical levels and is usually seen as a sign of a weakening labor market.

However, at the same time, another set of economic data tells a completely different story. Worker productivity— a key indicator driving economic growth—has remained high. Gross Domestic Product (GDP), which measures the output of all goods and services in the economy, is still performing strongly.

The Dilemma Facing the Federal Reserve

This coexistence of economic growth and sluggish employment has put Federal Reserve policymakers in a difficult position. They find it challenging to accurately determine whether the current economy needs further stimulus or if they should step on the brakes.

Economists point out that it is still unclear whether interest rate cuts are sufficient to offset the negative impact of major policy changes on corporate hiring behavior. Ryan Sweet, Chief U.S. Economist at Oxford Economics, said: “Fortunately, we have not yet seen large-scale layoffs; otherwise, the stagnation in employment growth could evolve into a recession. The economy can grow even without creating大量 jobs, provided productivity continues to grow strongly.”

Hidden Concerns About Economic Risks

This growth model, lacking employment support, is extremely fragile. If productivity growth slows or other economic indicators deteriorate, this seemingly healthy growth could quickly turn into a recession. For investors monitoring the global economic cycle, the signals from this set of economic data are ambiguous and cautionary.