US Labor Department Releases March Employment Figures

TFD – Dive into the latest updates from the US Labor Department as they release March employment figures, showcasing monthly payroll growth, wage increases, and the unemployment rate. Stay informed about the evolving job market trends and economic outlook.

From the summer of 2022, when it reached a 40-year peak, US inflation has decreased significantly. However, it continues to be higher than the Federal Reserve’s official 2% target.

Officials updated their growth and inflation forecasts during their most recent policy meeting earlier this month, and they reiterated their expectation to lower interest rates this year. That was seen by some economists as an indication that the Fed is now more accepting of rising inflation.

The necessity of controlling inflation is emphasized by central bankers time and time again. They frequently highlight the negative effects of inflation on all Americans, particularly those who are living paycheck to paycheck. The Fed has come a long way since raising interest rates to a 23-year high, but the last leg of the journey is proving challenging, or “bumpy,” as Fed Chair Jerome Powell likes to put it.

Based on the Fed’s preferred inflation measure, consumer prices increased 2.5% in February compared to the same month last year, according to data released on Friday. That represents the aforementioned increase from Powell and is a notch higher than the 2.4% yearly growth in January.

In his news conference following the meeting, Powell refuted the notion that the central bank has become more accustomed to higher-than-expected inflation.

Powell responded, “No, that’s not what it means.” “We did mark up our growth forecast, and so have many other forecasters, so the economy is performing well, and the inflation data came in a little bit higher as a separate matter and I think that caused people to write up their inflation [projections].”

Powell continued, “We’re firmly committed to bringing inflation down to 2% over time.” “The markets should have faith in our ability to reach that objective because it is what will ultimately transpire.”

Powell went on to say that, if the economy develops as anticipated, “it will probably be appropriate to begin dialing back policy restraint at some point this year.”

In a Financial Times opinion piece, economist Mohamed El-Erian stated that the Fed was taking a chance by indicating it will lower rates even if it still thinks inflation may increase soon.

Reputable central banks don’t often raise their GDP and inflation forecasts while maintaining a dovish policy stance, the speaker claimed.

Prior to the Bell, the Fed’s view of inflation was discussed with Lydia Boussour, senior economist at EY-Parthenon.

The interview has been condensed to improve clarity and duration.

What does the Federal Reserve’s assessment of inflation look like based on its most recent economic projections?

Lydia Boussour: According to the most recent forecasts, the Fed is prepared to exercise a little more patience in order to reach their objective. … after this month’s meeting, it seems to me that Fed Chair Powell wants to begin this easing cycle as soon as possible.

They increased inflation as well, though not as much, and recalculated growth to reflect a better economy. That seemed to me to be an indication that they are merely accepting the supply-side narrative that has been present in the US economy and that they think there is still room for non-inflationary growth.

What is making the Fed more tolerant of or patient with rising inflation?

They are basically ready to overlook some of the irregularities in the inflation numbers at the start of the year. Although there was some slowing in January and February, the Fed thinks that overall the long-term disinflationary conditions will hold.

There is a continuous rebalancing of the labor market, as seen by the steady expansion in employment, the slowdown in labor demand, and the increase in labor force participation. In this more delicate demand environment, companies are experiencing reduced pricing power, which is significant in my opinion since consumers are still spending, but they are being more frugal due to the weariness we are witnessing in the economy. In general, they believe that inflation will continue to decline and that they will be able to begin reducing rates at some point this year.

What has fueled this potential continued period of noninflationary growth?

The fact that the supply side of the economy has responded more than expected has taken many by surprise. Conditions in the supply chain have greatly stabilized, which contributes to the containment of commodities inflation. Productivity growth is the second component, and it is one that I believe is crucial to understanding the inflation story because it reduces the likelihood that businesses would pass on rising costs to customers.

The fact that immigration and the labor supply have both recovered is the third element. All of these variables have actually allowed the economy to continue moving at a good rate, and it’s happening at the same time that inflation has been declining. it has helped loosen the labor market, which was very tight a few years ago.

What Home Depot’s $18 billion purchase reveals about its business plan

As the home fixer-upper market stalls, my colleague Nathaniel Meyersohn reports that Home Depot is growing its business targeting professional contractors and builders through its largest acquisition to date.

On Thursday, Home Depot revealed that it would be investing $18.3 billion to acquire SRS Distribution, a massive supplier for construction projects that mostly serves pool contractors, landscapers, and roofers. Home Depot claimed that SRS, which will run separately, has more than 4,000 trucks and 760 facilities to transport its products.

Currently, housing professionals account for around half of Home Depot’s sales. These professionals spend more money at the store than do-it-yourself homeowners do on lawn mowers and power equipment. Home Depot is the fifth-largest retailer in the US. Both Lowe’s and Home Depot have been attempting to attract more business clients.

Go here to read more.

Next Up

Monday: March surveys measuring economic activity in the US manufacturing sector are released by S&P Global and the Institute for Supply Management.

Tuesday: Dave & Buster’s Entertainment and Cal-Maine Foods’ earnings. The US Department of Labor releases data for February including job opportunities, hires, resignations, and layoffs. Data on new orders for manufactured products placed in February is made public by the US Commerce Department.

Wednesday: Tupperware and Levi Strauss earnings. The statistics office of the European Union releases the March inflation results. The March employment data is released by ADP. S&P Global and the Institute for Supply Management release March surveys gauging economic activity in the US services sector. Fed Chair Jerome Powell participates in a forum at Stanford University.

The US Commerce Department publishes February trade flow figures on Thursday. The number of new applications for unemployment benefits for the week ending March 30 is reported by the US Labor Department.

Friday: March employment figures, including monthly payroll growth, wage increases, and the unemployment rate, are released by the US Labor Department.