Bloomberg Surveillance · Thursday, September 3, 2026
Michael Darda describes the US labor market as "steady, if unspectacular," with no signs of overheating. He notes that while the nonfarm payrolls were soft last month and the unemployment rate has been stable for two years, there is no significant run-up in wage growth that would indicate inflation.
“The labor market has looked steady, if unspectacular. We're not getting any signs of overheating from any of the labor market indicators. I mean, obviously, on the employment payroll side, we were soft this past month. And the labor market has also absorbed a lot of shocks with the shuttering of the border. At the same time, the unemployment rate has been at the same level for two years now. That's typically a situation you see when the economy is growing at about the growth rate of potential. So steady if unspectacular.”
“Certainly no run-up in wage growth that would look inflationary, although Fed Chair Walsh basically took the wage indicators away. and threw them off a clip in the Jackson Hole speech, citing a paper that argued they were lagging indicators of the business cycle. So he's not going to be focused there in terms of the front edge of inflation.”