6 May 2016
US NFP disappoints: Seasonal factors or a Trend? - Wells Fargo
According to analysts from Wells Fargo, a slower pace of job gains like the current report, if sustained, would lower the odds of a Federal Reserve hike in June.
Key Quotes:
“April job gains came in at a disappointing 160,000, while the unemployment rate was unchanged at 5.0 percent. Seasonal factors may have weighed on retail and construction. Wages continue to rise.”
“Overall job growth in April was a disappointing 160,000. The early Easter may have reduced the April retail trade numbers, while construction numbers may have been lowered by warm weather in previous months pulling hiring forward.”
“A slower pace of job gains, if sustained, would lower the odds of a FOMC move in June. There has been a dislocation between the trends in GDP and employment growth over the past six months, but today’s report raises the concern that GDP may be the better signal.”
“Another sign of tightening in the labor market is the acceleration in average hourly earnings while the unemployment rate remains around estimates of full employment (middle graph). Average hourly earnings rose 0.3 percent in April, putting the year-over-year gain at 2.5 percent. That said, the pace of wage gains has been modest compared to the past three economic expansions. Given the weak productivity figures, we should see upward pressure on inflation even with more modest gains in the labor market.”
“The slower pace of hiring in April and uncertainty over remaining slack raises doubts that the Fed will choose to raise rates again as early as its June meeting.”
Key Quotes:
“April job gains came in at a disappointing 160,000, while the unemployment rate was unchanged at 5.0 percent. Seasonal factors may have weighed on retail and construction. Wages continue to rise.”
“Overall job growth in April was a disappointing 160,000. The early Easter may have reduced the April retail trade numbers, while construction numbers may have been lowered by warm weather in previous months pulling hiring forward.”
“A slower pace of job gains, if sustained, would lower the odds of a FOMC move in June. There has been a dislocation between the trends in GDP and employment growth over the past six months, but today’s report raises the concern that GDP may be the better signal.”
“Another sign of tightening in the labor market is the acceleration in average hourly earnings while the unemployment rate remains around estimates of full employment (middle graph). Average hourly earnings rose 0.3 percent in April, putting the year-over-year gain at 2.5 percent. That said, the pace of wage gains has been modest compared to the past three economic expansions. Given the weak productivity figures, we should see upward pressure on inflation even with more modest gains in the labor market.”
“The slower pace of hiring in April and uncertainty over remaining slack raises doubts that the Fed will choose to raise rates again as early as its June meeting.”