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

ME News message, on April 4 (UTC+8), “Federal Reserve megaphone” Nick Timiraos wrote that March added 178k jobs, reversing the sharp decline in February. The unemployment rate also fell to 4.3%. But some details are less than encouraging: wage growth for ordinary workers slowed to the lowest year-over-year growth rate since the five-year post-pandemic recovery. Averaging these two more volatile months makes it clearer what the underlying trend may be: the monthly average net job additions were only 22.5k positions. Two years ago, adding 22.5k jobs per month was enough to raise concerns; today, such a level might still be viewed as acceptable. Federal Reserve officials are still working to explain this change. In a post Friday, San Francisco Fed President Daly wrote: “Helping the public understand that an economy with zero job growth still aligns with full employment is not easy.” With new supply shocks once again coming in, this situation is especially fragile. If the Iran war continues, high fuel costs or shortages of commodities could squeeze businesses and consumers, leaving the labor market without a buffer to absorb the shock. At the same time, because inflation concerns may weaken the certainty of rate cuts, the Fed’s policy room is also more limited. (Source: ChainCatcher)