Weaker-than-Expected Job Gains in April Boost Expectations for Rate Cuts
April nonfarm payrolls rose by 175k, falling short of the 240k gain expected. While still broadly indicating tight conditions, the labor market?appears to be cooling somewhat, resulting in some upward movement in the unemployment rate and more muted pressure on wages.?
?
For the Fed, the latest employment report reinforces the Committee’s assessment of “solid”?job gains, as well as the ongoing inflationary challenges.?Opting to hold rates steady for the sixth consecutive meeting this month, Chair Powell was clear the Committee would likely need to remain on the sidelines for much longer than previously expected to gain confidence that price pressures are sustainably easing course. Nevertheless, Powell also indicated that the Fed’s next move would "unlikely" be a rate hike, signaling a more dovish stance and a growing lean towards – eventual – rate cuts.?
?
This week, we take a closer look at the latest April?employment report and what it means for the pathway of rate cuts going forward.
?