The labor market might be a lot weaker than we thought. From Marketplace, I'm Sabree Beneshore, in for David Bruncaccio. The Federal Reserve decided to cut interest rates again at its meeting yesterday. One reason it decided to do that is because Fed officials think the labor market, which we already knew is cooling, is actually a lot weaker than it appears.

Marketplace is Nancy Marshall-Gensar. How's that?

Fed Chair Jerome Powell says the Fed is facing, quote, a complicated, unusual, difficult situation.

Because the Bureau of Labor Statistics could be overestimating the number of jobs being created by about 60,000 a month.

Powell says the actual number could be negative, a loss of 20,000 jobs per month.

The Fed Chair says this kind of forecasting is tough.

It's very difficult to estimate job growth in real time. They don't count everybody.

They have a survey. And there's been

something of a systematic overcount. And so we expected, and they correct it twice a year.

The BLS is going to change its modeling a bit. That could make the numbers more accurate starting

this February. But in the meantime, Powell says we're in a situation where job creation may actually be negative.

Now, supply of workers has also gone way down, so the unemployment rate hasn't moved that much.

Which could be giving workers a false sense of security. The BLS is scheduled to release the November

jobs numbers next week. Jobs data from this fall is late and in some cases incomplete because of

the government shutdown. I'm Nancy Marshall Genser for Marketplace. Something else Fed Chair Jerome

Powell mentioned yesterday was tariff inflation. He said import taxes should be just a one-time

bump in inflation. Diane Swank is chief economist at KPMG and joins us for more. Hey, Dan, Diane. So if tariffs are a

one-time deal, are we past tariff inflation yet? Well, first of all, we're not past it, and he didn't say

we were past it yet, but an important issue is that's at the heart of the debate at the Fed.

Tariffs are typically a one-time bump in prices. And so that is historically what you would count on, but that assumes that the tariffs occur all at once. Of course, they've been moved out

in waves, and it also assumes they don't come on the heels of a pandemic-induced inflation

that's persisted for nearly five

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