Net new job creation is cooling off. Nonfarm payroll growth at 164K in April came in a bit short of analysts’ expectations for the second month in a row.
Should we be worried about this deceleration in job growth?
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on May 4.Key observations:
- Economists, including at the Fed, have noted that monthly job growth above 200K jobs per month was unsustainable, given our sluggish labor force growth.
- The unemployment rate of 3.9% in April is the lowest unemployment rate in this country since December 2000.
- Why we aren’t seeing serious wage and inflation pressures from such a low unemployment rate is a puzzle that’s likely to consume the Fed staff in the weeks ahead.
- The cool-down in average monthly job growth makes me more comfortable with my forecast for just three interest rate hikes this year.
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The Federal Reserve held the fed funds target rate steady at the May FOMC meeting, as was widely expected.Read More ›
We see nothing in the statement today that would dissuade the FOMC from raising the fed funds rate again in June.Read More ›
While the headline number was a disappointment, the details in the report revealed underlying labor market strength and momentum.Read More ›
The Federal Reserve raised the fed funds target rate range today by a quarter percentage point to 0.75 to 1.00% from 0.50 to 0.75%, as expected. There was one dissent in the Federal Open Market Committee (FOMC) decision, as Neel Kashkari preferred to maintain the existing target range for the Fed funds rate. The move […]Read More ›