Upcoming Events
Monday, April 10
Survey of Consumer Expectations
GDPNow Update
Williams Speaks at NYU Kimmel Center
Tuesday, April 11
Goolsbee Speaks at Economic Club of Chicago
Harker Speaks at Wharton Initiative on Financial Policy and Regulation
Wednesday, April 12
CPI Release
Barkin Speaks at Investing in Rural America Conference
Daly Speaks at Salt Lake Chamber Event
Thursday, April 13
PPI Release
Friday, April 14
Surveys of Consumers Release
Industrial Production and Capacity Utilization Release
GDPNow Update
Waller Speaks at Graybar National Training Conference
Recent News
Maximum employment… The Bureau of Labor Statistics released its monthly Jobs Report on Friday. The Household Survey put total employment at 160.9 million (+0.6 million from prior month) in March, and unemployment at 5.8 million (-0.1 million). The unemployment rate declined from 3.6 percent to 3.5 percent. The labor force participation increased from 62.5 percent to 62.6 percent.
The Establishment Survey reported slower job growth: 236 thousand jobs were added in March, compared with 326 thousand in February and 472 thousand in January. Average weekly hours ticked down from 34.5 to 34.4, while average hourly earnings grew at an annualized rate of 3.3 percent.
Realigning supply and demand… Job openings declined for a second straight month, the latest JOLTS release shows. There were 9.9 million job openings on the last business day of February, compared with 11.2 million in December and 10.6 million in January.
Hirings and separations ticked down slightly at 6.2 million (-0.2 from prior month) and 5.8 million (-0.1 from prior month), respectively. Within separations, the number of people quitting jobs increased from 3.9 million in January to 4.0 million in February, while layoffs and discharges declined from 1.7 million to 1.5 million.
The latest JOLTS release suggests the labor market is evolving more or less how Federal Reserve Chair Jerome Powell had hoped. In March, during the Semiannual Monetary Policy Report to the Congress, Powell told Sen. Kennedy (D-LA) that the Fed was not trying to raise unemployment. “We’re trying to realign supply and demand, which could happen through a bunch of channels like, for example, job openings,” Powell said.
Slower growth… The Atlanta Fed’s running estimate of real GDP growth for Q1-2023 declined to an annualized rate of 1.5 percent on April 5. GDPNow looked much stronger last month, peaking at 3.5 percent on March 21 and closing out the month at 2.5 percent.
Fed fund futures… Markets still expect a 25 basis point rate hike in May, the CME Group reports. The odds are currently at 66.3%, compared with 57.2% one week ago.
As to whether rates will be lower in September than they are today, the latest data suggest it is a coin toss. The odds of a 4.5 to 4.75 percent target range in September are currently at 39.0 percent, with an 11.1 percent chance it will be even lower. There is a 49.9 percent chance that the target range will be at or above the current level in September.
In March, the FOMC projected the federal funds rate target will be 5.1 percent in December. The CME group currently puts the odds at just 0.9 percent.