U.S. Fed slashes interest rates by 25 basis points amid weakening labor market

WASHINGTON, Nov. 7 (Xinhua) — The U.S. Federal Reserve on Thursday slashed interest rates by 25 basis points amid cooling inflation and a weakening labor market, marking the second rate cut in this easing cycle.
“Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated,” the Federal Open Market Committee (FOMC), the central bank’s policy-setting body, said in a statement.
In support of its goals, the Committee decided to lower the target range for the federal funds rate by 0.25 percentage point to 4.5 percent to 4.75 percent, the statement said.
The Fed’s latest decision came after a weak employment report, which showed that U.S. employers added only 12,000 jobs in October, amid a cooling labor market. This slowdown was exacerbated by a strike and the impact of recent hurricanes.
The latest report also revised down employment for August and September, to a gain of 78,000 and a gain of 223,000, respectively. With these revisions, employment in the two months combined is 112,000 lower than previously reported.
After its Sept. 17-18 meeting, the central bank slashed the target range for the federal funds rate by 50 basis points, which marked the first rate cut in over four years and signaled the start of an easing cycle. ■