March 6 (Reuters) -

Federal Reserve policymakers held the benchmark overnight

interest rate steady in the 5.25%-5.50% range at the Jan. 30-31

policy meeting, but said they would consider reducing it once

they are more confident inflation will fall to the U.S. central

bank's 2% target.

Data on inflation, jobs and consumer spending will

influence that decision, with the next meeting on March 19-20.

Here's what's been happening:

JOB OPENINGS (Released March 6; next release April 2)

Fed Chair Jerome Powell keeps a close eye on the U.S.

Labor Department's Job Openings and Labor Turnover Survey

(JOLTS) for information on the imbalance between labor supply

and demand, and particularly on the number of job openings

potentially available to each person who is without a job but

looking for one. The ratio had been falling steadily towards its

pre-pandemic level, but has stalled for the last four months at

just above 1.4-to-1, higher than the 1.2-to-1 level seen before

the health crisis. Other aspects of the survey, like the quits

rate, have edged back to pre-pandemic levels.

INFLATION (PCE released Feb. 29; next release CPI March 12)

The personal consumption expenditures (PCE) price index,

which the Fed uses to set its 2% inflation target, increased at

a 2.4% annual rate in January, the slowest year-on-year increase

in nearly 3 years. Core inflation stripped of volatile food and

energy prices rose 2.8%, a slight decline from December's 2.9%

reading.

The numbers were in line with expectations and are a boost

to Fed officials looking for confirmation that price rises

continue to slow.

It also calms concern about a stronger-than-expected jump in

the consumer price index in January.

The CPI rose 3.1% on a year-on-year basis in January, down

from 3.4% in the prior month, but higher than analysts expected.

The core rate excluding food and energy costs, meanwhile,

remained unchanged at 3.9% in another reminder that the Fed's

inflation battle may last longer than anticipated. Rising

shelter costs contributed the bulk of the increase. While the

numbers may have been pushed higher by recent data revisions,

the reading showed that the decline in housing costs the Fed has

been looking for had again been postponed.

RETAIL SALES (Released Feb. 15; next release March. 14):

Retail sales fell more than expected in January, dropping

0.8%. They were pulled down by declines in receipts at auto

dealerships and gasoline service stations, and consumer spending

was also likely weighed down by winter storms. The decline

followed a fairly strong performance over the holiday season and

could indicate economic growth will slow sharply this quarter.

If it does, it would finally be a sign the aggressive rate

hikes Fed policymakers delivered from March 2022 to July 2023

are trimming overall demand for goods and services in what has

up to now been a markedly resilient economy.

EMPLOYMENT (Released Feb. 2; next release March 8):

U.S. firms added 353,000 jobs in January. That was up from

the sharply higher revised gain of 333,000 jobs in December.

The unemployment rate remained steady at 3.7%.

Fed officials have become more comfortable with the idea

that continued strong job growth could still allow inflation to

fall. But the growth in January was nearly double what

economists expected, and the job gains occurred across a broad

set of industries, dispelling concern that hiring had become too

focused.

The latest report may not shift views greatly at the Fed

about the coming path of inflation, but it may do little to

advance arguments for cutting rates sooner rather than later.

Wage growth jumped to an annual 4.5% after showing signs of

cooling. Powell has said wage growth adjustments could take

place over time, and recent strong productivity gains help mute

any impact that wage increases may have on prices.

Still, the level in January is well above the 3.0%-3.5%

range that most policymakers view as consistent with the Fed's

2% inflation target.