The U.S. economy expanded more slowly in the second quarter, adding to signs that growth is losing momentum after a stronger start to the year. Fresh data also pointed to a cooling labor market, with hiring easing and employers showing less appetite to add workers at the same pace as before.

At the same time, inflation has remained sticky, keeping pressure on households already facing higher costs for essentials. The combination of slower growth, softer hiring and persistent price gains is complicating the Federal Reserve’s efforts to balance support for the economy with its fight against inflation.

Markets are now watching closely for clues about the central bank’s next move. Policymakers have been trying to avoid cutting rates too soon while also guarding against a deeper slowdown, and the latest figures suggest they may have less room to wait for a clear direction.

The data paints a picture of an economy that is still expanding, but with less strength than earlier in the year. For workers and consumers, the slowdown may bring mixed relief: some easing in job competition, but continued strain from high prices and uncertain policy ahead.