"When pressed by reporters on why hiring has slumped, Powell responded: "That's much more about the change in immigration," He continued, "The supply of workers has obviously come way down. There's very little growth, if any, in the supply of workers. And at the same time, demand for workers has also come down quite sharply, and to the point where we see what I've called a curious balance.""
""Now demand [is] coming down a little more sharply, because we see, we now see the unemployment rate edging up," he added. The Fed cut interest rates by a quarter percentage point on Wednesday in what Powell described as a "risk management cut," aimed at cushioning the economy against further job losses, while stressing policy is moving "toward a more neutral policy stance" and is "not on a preset course.""
The Federal Reserve linked the cooling job market to restrictive immigration policy under President Donald Trump, noting a marked decline in worker supply. Labor demand has also fallen, producing an unhealthy equilibrium in which demand is declining faster than supply and the unemployment rate is edging up. The Fed enacted a 25 basis-point rate cut described as a risk-management measure to cushion the economy and move policy toward neutral. Administration deportations and tightened immigration enforcement are projected to remove large numbers of immigrants, a shift economists warn will shrink the labor force and weigh on GDP growth.
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