(Bloomberg) -- Federal Reserve Bank of Chicago President Austan Goolsbee said additional jobs reports like Friday’s would give him comfort the economy is not overheating.

The Chicago Fed chief declined to say whether interest-rate cuts are likely this year, saying he’s still waiting for more data to confirm inflation is on track to the Fed’s 2% target.

“We hit a bump for sure at the start of the year on the inflation front,” Goolsbee said Friday in a Bloomberg TV interview with Michael McKee at a conference at Stanford University in California. Officials need to take a step back to determine whether that’s a sign of a reacceleration of the economy, he added.

“The more jobs reports you get like this where they’re solid but it’s clearly moving back into something that looks like pre-Covid,” Goolsbee said, “the more confident we can be that the economy is not overheating.”

Goolsbee’s comments came after the government reported a moderation in the US labor market last month. Employers added 175,000 jobs last month, the smallest gain in six months, a Bureau of Labor Statistics report showed Friday. The unemployment rate ticked up to 3.9% and wage gains slowed.

Investors now see a rate cut in September as likely following the jobs report.

The Fed held interest rates steady Wednesday for a sixth straight meeting on Wednesday and signaled fresh concerns over inflation. Chair Jerome Powell said it will take “longer than previously expected” to gain confidence price pressures are returning to the Fed’s 2% goal in order to lower rates.

Read More: Powell Keeps Rate Cuts on Table But Leaves Timing Less Certain

Earlier, Fed Governor Michelle Bowman said inflation will likely remain elevated for “some time,” but added she still anticipates price gains will eventually cool with interest rates held at current levels. 

Economists said signs of a cooling economy could nudge the Fed to lower interest rates over time, but that inflation data would be more important. 

“If payrolls and wages continue to slow over coming months, then rate cuts are likely to come sooner rather than later,” said Rubeela Farooqi, chief US economist at High Frequency Economics. “We need to see more data to understand whether this was a blip or the start of a new trend.”

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