The labor market is balancing on a knife edge, and the factors weakening it aren’t going anywhere

Jerome Powell's job is going to get even more complicated thanks to labor market data. (Credit: Al Drago—Bloomberg/Getty Images)

• ANALYSIS: Weakening labor data—from downward payroll revisions to new job openings falling to just 22,000 for August—has raised concerns the Fed may soon need to prioritize a cut to interest rates to support employment over its inflation fight. Economists told Fortune uncertainty over Trump administration policies and AI disruption are weighing on hiring. Recent college graduates are hardest hit. While unemployment remains stable for now, experts warn the equilibrium is fragile, and even a modest rise in layoffs could have wider ripple effects throughout the economy.

For months—perhaps even years now—the labor market has trucked along and allowed the Federal Reserve headspace to contend with its favorite problem child: inflation.