(Reuters) -San Francisco Federal Reserve Bank President Mary Daly said on Thursday a softening labor market and inflation that has come in "much less" than people had feared warranted last month's U.S. interest-rate cut and prompted the Fed to signal more rate cuts could be ahead.

"The economy is slowing a little bit. Consumers are running out of all the excess savings they might have had and they've been dealing with a higher price level. And then we have restrictive monetary policy," Daly said at an event at the Silicon Valley Directors Exchange.

"We're to a point now where the softening in the labor market looks like it could be more worrisome if we don't risk manage it."

(Reporting by Ann Saphir; Editing by Muralikumar Anantharaman)