How Resilient Will the US Consumer Be Without a Job?

Imagine headlines flashing news of 20,000 jobs lost each month from US payrolls. Consumer and investor sentiment would crater and the pressure on the Federal Reserve to keep cutting interest rates would be intense. Yet, that’s likely the current state of the labor market, Chair Jerome Powell said Wednesday, while raising the bar on further policy easing.

Powell was accounting for data revisions next year, which he expects will shave 60,000 positions, on average, from the monthly payrolls numbers we’ve had since April. His prognosis was aggressive, but it painted a wholly familiar picture of a moribund labor market where the official data show that goods-producing sectors have cut 72,000 jobs since April and services employment grew thanks only to healthcare and education.