Firm April Payrolls Mean Fed Can Remain Focused on Inflation

US April payrolls grew by 115k, beating expectations, while the unemployment rate stayed stable at 4.3%. This resilience allows the Federal Reserve to keep its policy focus on upside inflation risks rather than labor market weakness.

Key Takeaways

• 1.April employment growth of 115k significantly exceeded consensus expectations of 65k, indicating a resilient US economy.
• 2.The unemployment rate remained steady at 4.3%, which aligns with the upper end of the Fed's long-run equilibrium estimate.
• 3.Earnings growth is cooling, with a 3.6% year-on-year increase that the Fed views as non-inflationary when coupled with productivity growth.

Table of Contents

• Key points
• Unemployment rate steady around the Fed's longer-run estimate
• Firm employment growth implies resilient economy
• Current earnings growth no risk to inflation
• Falling participation with immigration restrictions and aging population
• Employment data allows the Fed to focus on inflation risks

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial