Federal Reserve Bank of San Francisco Report: The U.S. labor market continues to increase inflationary pressure

A research report released by the Federal Reserve Bank of San Francisco on Monday stated that the tension in the U.S. labor market continues to increase inflationary pressure, although its degree is lower than in 2022 and 2023. "In the past two years, a decrease in labor demand has lowered the inflation rate by nearly 0.75 percentage points," economists Regis Barnichon and Adam Hale Shapiro from the Federal Reserve Bank of San Francisco wrote: "However, as of September 2024, high demand still contributes to inflation by 0.3 to 0.4 percentage points." The research from the Federal Reserve Bank of San Francisco shows that employment market remains a source of inflation. Powell estimates that according to Fed's target measurement standards, October's inflation rate was at 2.3%, while excluding food and energy - which are used by Fed for measuring core inflation pressures - it stood at around 2.8%.