The long-robust US job market is continuing to cool, according to several economic indicators released this week. That marks some progress for the Federal Reserve, which is looking for weaker job creation and an overall slowdown in demand in order to defeat inflation.

Specifically, Fed Chair Jerome Powell said last week the central bank needs to see "below-trend growth" for a sustained period to be assured that inflation is on track to 2%, the Fed's stated inflation target.

Powell warned last Friday in a keynote speech at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, that evidence of "persistently above-trend growth" could lead to "further tightening of monetary policy," — or, more simply, additional rate hikes.

The Labor Department's August jobs report should help diminish those fears.

The Fed is no longer "chasing inflation," wrote Steve Wyett, chief investment officer at BOK Financial, in an analyst note. Instead, central bank officials have likely moved into a position where they can "allow the impacts of their actions to date to filter through the economy and markets."

Here are key takeaways from the job market data this week and what it all means for the Fed.

It's clear the labor market has cooled

There are plenty of signs that the job market has continued to weaken and that momentum is largely expected to continue in the months ahead.

The unemployment rate rose to 3.8% in August from 3.5% in July, the Bureau of Labor Statistics reported Friday. Rising unemployment is bad news for Americans, but for the Fed it means some demand has been taken out of the economy, helping ease price pressures. Robust demand typically prompts employers to staff up to meet that demand, which could mean they offer higher wages to successfully lure talent. Those higher costs could be passed on to US consumers.

The August jobs report showed that average hourly earnings grew at a monthly pace of just 0.2%, or 4.3% annually. In July, those numbers were 0.4% and 4.4%, respectively.

Job openings fell below 9 million in July for the first time since March 2021 and the rate of people quitting fell back to pre-pandemic levels, the Labor Department said earlier this week.

"Pretty much everything in the labor market has cooled back to the pre-pandemic temperature," Julia Pollak, chief economist at ZipRecruiter, told CNN. "But the recent pace of cooling has been concerning for a couple of economists because we've seen a pretty steep deceleration in working hours, temporary-help services and other indicators."

Temp jobs contracted by 19,000 in August. Meanwhile, the average workweek for all private employees edged up last month, though it has trended down since the beginning of the year.

Earlier this week, the Commerce Department reported that the US economy grew at a slower pace in the second quarter than previously estimated, largely due to a big downward revision to business investment. But consumer spending, the US economy's main engine, jumped 0.8% in July, the strongest monthly spending gain since January.

Still, economic data this week seems to have reflected enough moderation for the Fed to pause rates later this month when officials meet to deliberate monetary policy. Interest rates are currently at their highest level in 22 years.

A steady slowdown for the job market paves the way for a soft landing

The job market is widely expected to moderate throughout the year in tandem with the broader economy, and while monthly gains are still higher than the pace required to keep up with population growth, the labor market is slowing down.

Overall, the job market is "coming back to earth, but from a very high peak," said Nick Bunker, head of economic research at Indeed, in a note Friday.

"Payroll gains were never going to keep up their pace from last year. Wages weren't going to grow indefinitely at an over 6% annual rate. The labor market was sprinting last year and now it's getting closer to a marathon pace. A slowdown is welcome; it's the only way to go the distance," Bunker said.

But economists and investors no longer expect a recession anytime soon. The job market holding steady means the Fed still has a shot at pulling off a soft landing — a scenario in which inflation falls back to the Fed's 2% target without a sharp rise in unemployment.

Headwinds lie ahead for the US economy

Banks have toughened their lending standards, Americans have put themselves in more debt, student loan repayments resume in October, and there's still uncertainty over the extent to which the Fed's 11 rate hikes over the past year and a half will ultimately weigh on activity.

Those factors could all break the US consumer, and if Americans are spending much less, companies could begin to lay off workers if their bottom line is taking a hit. It remains to be seen how resilient the US economy will be in the coming months.

It's also possible the job market holds steady if recession fears continue to fade, allowing businesses to address stubborn staffing shortages. Some small businesses continue to struggle with hiring.

"There are many companies who still say they've been unable to fill a vacancy due to a shortage of skilled candidates, but this tremendous pent-up demand has been put on hold since the start of 2022 due to fears of a recession," Pollak said.

"But if they know for sure that rates are going to start coming down and there won't be a recession, that might give them the freedom to conserve less capital and to grow again."