Powell Warns Trump White House May Have Covered Up Weak Jobs Reports as Unemployment Hit 4.4%
Federal Reserve Chair Jerome Powell confirmed Wednesday that the U.S. labor market is showing clear signs of weakening, with unemployment slipping higher and job growth slowing sharply, a key factor behind the Fed’s latest policy shift.
Powell’s remarks in Washington reaffirmed growing concerns among policymakers that hiring momentum has faded and the labor market may be softer than headline data suggests, fueling market and policymaker tension over the outlook.
According to the Associated Press and Reuters, September’s official jobs report showed the unemployment rate rising to 4.4%, the highest in several years, even as job gains were modest compared with earlier in 2025.
Complicating the picture, Powell told reporters that standard government measures of job creation, which show modest growth, could be overstating actual hiring by as much as tens of thousands of jobs per month, due to statistical modeling challenges at the Bureau of Labor Statistics. “We think there’s an overstatement in these numbers,” he said, highlighting data quality concerns.
That acknowledgment came as the Fed cut its benchmark interest rate by a quarter-point for the third time this year, citing increased downside risks to the labor market. Despite this rate move, some Fed officials now see only one additional cut next year and are hesitant to ease policy further without clearer evidence of economic weakening.
A cooling labor market, especially one where unemployment is rising and job growth is potentially overstated could weigh on consumer spending, dampen economic growth, and shift the Fed’s policy stance toward caution.
Markets and economists will closely watch the release of October and November jobs data for confirmation of the slowdown and revised benchmarks that could validate or counter Powell’s concerns.
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