"Federal Reserve mouthpiece": Low employment growth may become the new normal, but it is especially fragile in the context of war

ME News message, April 4 (UTC+8), “Fed’s megaphone” Nick Timiraos wrote that new jobs added in March were 178k, reversing the sharp decline seen in February. The unemployment rate also fell to 4.3%. But some details are not so encouraging: wage growth for ordinary workers slowed to the lowest year-over-year increase in the five years since the post-pandemic recovery. Averaging these two more volatile months makes the underlying trend clearer: the monthly average added only 22.5k jobs. Two years ago, monthly job gains of 22.5k were enough to raise concern; today, that level may still be viewed as acceptable. Federal Reserve officials are still working to explain this change. San Francisco Fed President Daly wrote on Friday: “It isn’t easy to help the public understand that an economy with zero job growth still aligns with full employment.” With a new round of supply shocks coming again, this situation is especially fragile. If the war between Iran continues, high fuel costs or shortages of goods could squeeze businesses and consumers, leaving the labor market with insufficient cushion to absorb the shock. At the same time, concerns about inflation may weaken the certainty of rate cuts, further limiting the Fed’s policy space. (Source: ChainCatcher)