2023-05-05 15:15:00
In the United States, April employment and wage growth both beat market expectations.This will allow the US Federal Open Market Committee (FOMC) to maintain high policy interest rates for a long period of time.The odds have grown. The June meeting might see an 11th consecutive rate hike.
Nonfarm payrolls increased by 253,000 from the previous month, according to April employment data released by the U.S. Department of Labor on Thursday. The unemployment rate fell once more to a multi-decade low of 3.4%.
U.S. payrolls grow faster than expected; wages pick up, suggesting strength in labor market
Federal Reserve Chairman Jerome Powell said at a news conference following the FOMC meeting on Wednesday that the labor market remained “extremely” tight and that he would raise interest rates several more times to cool the economy. He said the labor market was one of the data policymakers, including himself, would scrutinize carefully to determine whether a policy change would be needed.
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“The jobs report “reduces the odds of a rate cut and strengthens the view that interest rates will remain high over the long term,” said Neil Dutta, head of U.S. economic research at Renaissance Macro Research.
The outlook for policy rates continues to diverge between the market and the Fed. Financial markets expect a rate cut as early as September, but none of the 18 FOMC participants expect a rate cut this year.
news-rsf-original-reference paywall">Original title:Hot Jobs Report Raises Odds Fed Keeps Rates Higher for Longer(excerpt)
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