Fed officials uneasy about job market as they get ready for Jackson Hole

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WASHINGTON, Aug 20 - Federal Reserve officials gathering at the annual central banking conference in Jackson Hole, Wyoming, this week can take some satisfaction that the U.S. unemployment rate, at 4.3%, remains low by historical standards.

"The balance of risks has shifted, so the debate about potentially cutting rates in September is an appropriate one to have," Minneapolis Fed President Neel Kashkari said in a recent Wall Street Journal interview, referring to the central bank's Sept. 17-18 policy meeting. Fed Chair Jerome Powell is expected to further pin down the view that the central bank is about to start to loosen credit conditions after taming the worst outbreak of inflation in 40 years when he speaks on Friday at the Kansas City Fed's Jackson Hole conference.

The trend began changing this year, and Fed officials have given increasing weight to the risks they feel they are running by keeping monetary policy too tight for too long.The U.S. government reported weaker-than-expected job growth in July, with employers adding just 114,000 positions. The July reading pulled the three-month average below the pre-pandemic trend, and pushed the unemployment rate up two-tenths of a percentage point to 4.3%.

Yet at the same time unemployment claims have not begun to rise dramatically, and in fact have kept pace with growth in the labor force.

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