The Globe and Mail reports in its Friday, Aug. 9, edition that the Federal Reserve had been successfully combatting inflation. A New York Times dispatch to The Globe reports that price increases were decreasing, the economy was growing steadily and consumers were spending. The labour market was also doing well. As a result, policy-makers seemed ready to slightly lower interest rates at their meeting on Sept. 18. It appeared that the economy was settling into a comfortable balance, and central bankers were on the brink of achieving the rare feat of cooling inflation without harming the economy. However, just as this positive outlook emerged, challenges began to arise on the horizon. The unemployment rate has moved up meaningfully over the past year, and a weak employment report released last week has stoked concern that the job market may be on the brink of a serious cool-down. That is concerning, because a weakening labour market is usually the first sign that the economy is careening toward a recession. The Fed could still get the soft landing it has been hoping for -- weekly jobless claims fell more than expected in fresh data released Thursday, a minor but positive development.