American central bankers have grown more fearful, saying a global slowdown and President Donald Trump's trade wars could drag down hiring and the broader economy with it, meeting minutes showed Wednesday.
While the outlook remains good for the moment -- with strong jobs markets, low unemployment and the general public continuing to loosen purse strings -- weaker recent economic data have put clouds on the horizon, the minutes showed.
"Participants generally had become more concerned about risks associated with trade tensions and adverse developments in the geopolitical and global economic spheres," according to the minutes from the Federal Reserve's September 17-18 meeting.
Several noted that models gauging recession probabilities had "increased notably in recent months."
At that meeting, a majority of Fed policymakers voted to cut interest rates and markets expect them to do so again later this month, helping to cushion the world's largest economy as exports weaken, industrial costs rise and foreign demand sinks.
But members of the central bank are grappling with a complex economic picture, the minutes showed, as ominous developments creep into what has otherwise been a sunny picture of steady growth and historically low unemployment.
While some have grown more anxious, a minority oppose rate cuts, saying the economy's current health does not justify them.
Economic forecasters expect third quarter GDP growth will prove the slowest of the year but remain solid, a view shared by members of the Fed's interest-rate-setting Federal Open Market Committee, according to the minutes.
"Participants agreed that consumer spending was increasing at a strong pace," they said.
But several noted that skittish companies had stopped investing, which ultimately could cause "slower hiring, which in turn, could damp the growth of income and consumption."
"Participants generally judged that downside risks to the outlook for economic activity had increased somewhat since their July meeting," the minutes said.
Indeed, a "clearer picture" was emerging of a drawn-out slump in business spending, a recession in manufacturing and a steep fall-off in exports.
Following the September Fed meeting, the Commerce Department reported that in August annual growth in consumer spending had been the weakest in nearly a year.
Labor Department figures also released Wednesday showed softening demand for workers that month as well.
Meanwhile, indicators tracking manufacturing and services industries, as well as business and consumer confidence -- so-called "soft" indicators often seen as a harbinger for weakness in hiring and spending -- continued to worsen.
On the other hand, unemployment in August fell to its lowest level in 50 years, demand for housing is rising and the pace of hiring, while slower, remains more than strong enough to absorb new entrants into the labor market, economists say.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.