Upcoming Events
Monday, March 11
Survey of Consumer Expectations Release
Tuesday, March 12
CPI Release
Thursday, March 14
PPI Release
Friday, March 15
Industrial Production and Capacity Utilization Release
Recent News
Humphrey–Hawkins hearing… Federal Reserve Chair Jerome Powell testified before the U.S. House Financial Services Committee and U.S. Senate Committee on Banking, Housing, and Urban Affairs last week following submission of the Fed’s semiannual Monetary Policy Report. He said the Federal Open Market Committee (FOMC) will not begin cutting its federal funds rate target “until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
We want to see a little bit more data so that we can become confident, and so that we can take that step of beginning to reduce policy rates. It’s a very important step. We think, because of the strength in the economy and the strength in the labor market and the progress we’ve made, we can approach that step carefully and thoughtfully and with greater confidence. And, when we reach that confidence—the expectation is that we will do so sometime this year—we can then begin dialing back the restriction on our policy.
The Personal Consumption Expenditures Price Index (PCEPI), which is the Fed’s preferred measure of prices, has grown at a continuously-compounding annual rate of 2.5 percent over the last six months and 1.8 percent over the last three months. Core PCEPI, which excludes volatile food and energy prices, has grown 2.5 and 2.6 percent over the same periods.
The CME Group puts the odds of a March rate cut at just 3.0 percent. There’s a 23.2 percent chance that the federal funds rate target range will be lower in May and a 73.1 percent chance it will be lower in June.
Employment situation… The economy added 274,000 jobs in February 2024, according to the latest release from the Bureau of Labor Statistics (BLS).
Total nonfarm payroll employment was revised down by 43,000 for December 2023, from +333,000 to +290,000. It was revised down by 124,000 for January 2024, from +353,000 to +229,000.
The labor force increased from 167.3 million in January 2024 to 167.4 million in February 2024, while the total number of employed persons declined from 161.2 million to 161.0 million. The total number of unemployed persons increased from 6.1 million to 6.5 million, with the unemployment rate increasing from 3.7 percent to 3.9 percent.
JOLTS… The number of job openings was more or less unchanged in January 2024, the BLS reported last week. There were 8.9 million openings on the last business day of the month. Job openings have generally declined over the last year. There were 10.4 million job openings on the last business day of January 2023.
According to the BLS, there were 5.7 million hires in January 2024, down from 5.8 million in December 2023. There were 5.3 million separations, compared with 5.4 million in the prior month.
Within separations, there were 3.4 million quits (roughly unchanged from prior month) and 1.6 million layoffs and discharges (also roughly unchanged).