The Fed Can’t Put Off Preparing for Rate Cuts

As the economy slows down toward its speed limit, it might be time to start thinking about easing up on the brake. That doesn’t mean the driver has to inform the passengers.

Friday’s employment report showed that the economy added a seasonally adjusted 199,000 jobs last month, a move up driven in part by the end of the auto strikes, from October’s gain of 150,000 jobs. The unemployment rate slipped to 3.7% from 3.9%, and would have fallen even more if not for the entry of more people into the labor pool. Average hourly earnings were up 4% from a year earlier which, coming alongside cooling inflation, shows that workers’ buying power increased.