Fed is behind. Still no reason to panic.

Friday’s jobs report revealed weakness across a number of dimensions: The 114,000 new jobs added in July fell short of expectations; gains from previous months were revised downward, and year-over-year wage growth of 3.6% was lower than June’s 3.8%.

Fears are growing that the Fed is lagging and should start cutting now. Those concerns are exacerbated by the fact that the Fed has no rate-setting meetings scheduled for August or October, giving it a narrow path to lower rates. Off-schedule moves are possible but rare, usually reserved for emergencies.

Fed funds futures are pricing in a better than 70% chance of a 0.5 percentage point cut, twice the usual rate at the September meeting, up from 15% just days ago, according to CME Group’s FedWatch tool. But markets found little solace in that. Stocks and Treasury yields fell Friday.

Still, investors shouldn’t lose their heads. Yes, the job market is weakening. But the economy isn’t in terrible shape. Gross domestic product grew at an annual rate of 2.8% in the second quarter. The unemployment rate, at 4.3%, is fundamentally healthy.

There was even some good news in Friday’s report — that the labor force participation rate continued to rise in July. Perhaps the best news for the longer-term economic outlook came in Thursday’s data, which showed that worker productivity rose a brisk 2.7% in the second quarter from a year earlier.

Moreover, never forget that once the Fed decides to act, its firepower is formidable. With rates this high, there is plenty of room to cut them. Expect Fed officials to start sending more dovish signals well before the September meeting.

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So instead of getting mad at the Fed and hitting the sell button, investors should consider the opportunities that are emerging. Of course, there are sectors that benefit from lower rates, such as housing. Especially with a still healthy economy, that sector could thrive.

Mortgage lender Rocket Cos. jumped 12.3% Friday on expectations that lower interest rates could unblock the housing market, while competitors loanDepot and UWM Holdings jumped 11.3% and 8.1%, respectively. That’s encouraging. If home purchases pick up, the entire economy, from home retailers to materials stores, could benefit.

Consumer staples have had a hard time lately, but their relatively high dividends are becoming more attractive as interest rates fall. Low-income consumers who are cutting back on spending and switching to private labels, a major concern for the sector, may be getting a break from interest-rate cuts on credit card and car payments. Many consumer companies also have significant foreign profits that will be worth more if the dollar falls.

Even in recently overheated sectors like technology, panic selling can bring opportunities. If you believed in the transformative promise of AI last week, you shouldn’t be put off by lower prices now. Ultimately, lower rates, whenever they come, will make it easier to finance the expansion of AI data centers, as well as clean energy production and other transformative technologies.

The Fed may take a day off in August. Investors can start preparing for lower interest rates now.

Write to Aaron Back at [email protected]