As the labor market in the US shows signs of losing steam, economists and Federal Reserve officials are warning of potential hardships for American workers. Job openings are declining, and employees are hesitating to quit, signaling the end of tight labor conditions experienced during the post-pandemic recovery. The fear is that a further softening in the labor market could jeopardize economic growth, especially as inflation remains above the central bank’s target. Key reports from the Bureau of Labor Statistics this week will provide more insight into the direction of the labor market. Job seekers are finding it more challenging to secure employment, with longer wait times and increased selectivity from employers. The Fed remains optimistic but acknowledges rising risks, with some economists suggesting the market may be at an inflection point, vulnerable to a downturn. Monitoring the labor market for any potential tipping point has become increasingly complex, with conflicting signals in the data. The critical moment for the Fed lies in understanding that labor market losses can escalate rapidly once they begin.