US: Job gains consistent with a June Fed rate hike - Wells Fargo
|According to analysts from Wells Fargo, April’s jobs gains were below the 3-month average but enough to maintain momentum in a tight labor market as wages rise and the unemployment rate fell to 3.9 percent. They see the data consistent with a rate hike in June.
Key Quotes:
“Nonfarm payrolls rose 164,000 in April with the three-month average at a solid 208,000 jobs.”
“Current job gains are consistent with 2.5-3.0 percent economic growth in the current quarter and an FOMC June rate hike.”
“Jobs gains appeared broad-based, with most sectors experiencing gains over the month.”
“After six months at 4.1 percent, the unemployment rate broke through the four percent level and declined to 3.9 percent. That puts it at the lowest level in 18 years. The efficacy of the traditional unemployment rate as a measure of labor market slack has been questioned in the current cycle, given the substantial drop in labor force participation and higher rates of under-employment since the recession.”
“While the headline unemployment rate continues to paint a brighter picture of the labor market, other measures point to the issue of slack largely disappearing in the labor market.”
“The dwindling rate of available workers suggests labor force participation may, as we saw in today’s report, struggle to rise unless greater opportunities and/or higher compensation can lure more workers into the labor market.”
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