Good news about the US economy remains bad news for Wall Street, whose leading indicators slumped on Friday on concern that the US labor market itself, while still strong, could contribute to a recession.

The government reported that employers hired more workers last month than economists expected. Wall Street fears that the Federal Reserve will see this as proof that the economy has not yet slowed enough to keep the rate of inflation under control. That could clear the way for the US central bank to continue raising interest rates aggressively, something that risks triggering a recession if done too forcefully.

“The employment situation remains good and that could be a bit frustrating for the Fed,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “The Fed believes we need more jobless people to make sure inflation comes down and stays down.”

As of 3:06 p.m., the S&P 500 index was down 2.71%, while the Dow Jones Industrial Average was down 2.12%. The Nasdaq Composite, led by technology stocks, slumped 3.54%.

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