Federal Reserve Chair Jerome Powell on Tuesday said that the economy continues to see a softening of the labor market despite the government shutdown delaying the release of official jobs and inflation data.

Powell spoke at the National Association of Business Economists (NABE) after receiving the Adam Smith Award for his work on applying economic principles in policy. The Fed chair said while the September jobs report and inflation data, available data suggests that the sluggish labor market and tariff-induced inflationary pressures are persisting.

"While the unemployment rate remained low through August, payroll gains have slowed sharply, likely in part due to a decline in labor force growth due to lower immigration and labor force participation," Powell said. "In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen." 

"While official employment data for September are delayed, available evidence suggests that both layoffs and hiring remain low, and that both households' perceptions of job availability and firms' perceptions of hiring difficulty continue their downward trajectories," he said.

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