236,000 Americans got a job in the month of March, and experts are surprised by this shift. The Fed continues to rise the interest rates, which usually leads to the unemployment rate to increase. It did fall from January, but only by .1% to 3.5% to keep up with the lowest rates America has need in over half a century. The labor force participation rate is now up to 62.6%,m the highest it's been since COVID. People want jobs and they are finding them with ease. The African American unemployment all fell to half a century lows when it reached 5% last month.
All of this consistency and success in the job market could led to the Fed dropping the interest rates because the job market is helping keep the economy stable. Although it probably won't be by much, a drop in interest is definitely wanted and needed by the American economy. With the recent fear of a recession ever looming around the corner, seeing this positive data is the perfect way to part the storm. This data is also the last employment data seen by the Fed before they meet in May, making the historically positive numbers a vital role for the future of the American economy.
https://apnews.com/article/jobs-unemployment-inflation-layoffs-economy-federal-reserve-40add7d390eca72a0294c8d5c80b2dd6
3 comments:
After reading your take on the job market I realized there are a lot of things that I didn't cover in my post and some things I covered that you didn't. I believe for big topics like this it is important to have multiple outlooks and perspectives which is why I enjoyed reading this post as it compliments mine as well.
Even though the market does want a rate cut to avoid a looming recession, inflation is still not out of the game yet, hovering at 5% in March. As long as inflation is still strong, multiple areas of the economy will be affected: consumers, businesses...I would expect a couple of low rate hikes from the Fed towards the year end to bring inflation back to the target rate of 2%. We will see how it turns out.
While the addition of 236,000 jobs is important, I think increase in the labor force participation rate to 62.6% is very good news. This means more people are contributing to GDP, which benefits the economy as a whole. However, I do not think the Fed will lower interest rates as the latest inflation data is still well off the Fed's goal of 2%.
Post a Comment