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Strong March Job Numbers Bolster Fed’s Case for Status Quo on Rates
March job growth was considerably stronger than expected, with 303,000 net positions added during the month, according to U.S. Labor Department figures. The hiring numbers, more than half again as large as the 200,000 positions anticipated by economists, bolstered the Federal Reserve’s belief that it’s in no rush to begin lowering the federal funds rate.
Michael Feroli, chief U.S. economist at JPMorgan Chase, told the Wall Street Journal Friday he expected the Fed to push back the timing of its first cut to July instead of June, given the “apparent absence of any cracks developing” in the economy.
The WSJ also quoted remarks from Dallas Fed president Lorie Logan, who said Friday that given the “meaningful risks” that inflation runs at closer to 3% than the Fed’s 2% target, it is “much too soon to think about cutting interest rates.”
At the National Association of Realtors, chief economist Lawrence Yun said, “More jobs mean more potential housing demand in the future. But more jobs also mean the interest rate decline could stall as the Federal Reserve re-evaluates inflation risk.
“Wage growth was 4.1% in March after two straight years of above 5% gains. This decelerating wage growth can lessen consumer price inflation. Overall, mortgage rates are likely to remain unchanged, with no further measurable declines in upcoming months.”
- ◦Economy
