By Michael S. Derby

NEW YORK Federal Reserve Bank of Cleveland President Loretta Mester said on Friday that the U.S. labor market remains strong despite signs of it coming into better balance, while noting future interest rate decisions will be made based on incoming data.

“In the labor market, some progress is being made in bringing demand and supply into better balance, but the job market is still strong,” Mester said in a speech text, adding “job growth has slowed and job openings are down, but the unemployment rate is low, at 3.8%.”

Mester's remarks arrived just after the release of hiring data for August which showed some signs of cooling in the employment sector. While the economy added 187,000 jobs last month, the unemployment rate rose from 3.5% in July to 3.8% in August, which was higher than economists expected.

Future Fed rate decisions “will require close monitoring of economic, banking, and financial market developments and using all of that economic reconnaissance to determine whether the economy is evolving in line with the outlook or not,” Mester said.

(Reporting by Michael S. Derby; Editing by Andrea Ricci)