"Federal Reserve mouthpiece": Low employment growth may become the new normal, but it is especially fragile in the context of war

ME News update: On April 4 (UTC+8), “Fed megaphone” Nick Timiraos wrote that in March, 178,000 jobs were added, reversing the sharp decline seen in February. The unemployment rate also fell to 4.3%. However, some details are not very encouraging: wage growth for ordinary workers slowed to the lowest year-over-year pace in the five years since the post-pandemic recovery. Averaging these two months with volatile swings makes the underlying trend clearer: the average monthly net job gains are only 22,500 positions. Two years ago, monthly job gains of 22,500 would have been enough to raise alarm; today, this level may still be viewed as acceptable.

Federal Reserve officials are still working to explain this change. San Francisco Fed President Daly wrote on Friday: “Helping the public understand that an economy with zero job growth still aligns with full employment is not easy.” With another supply shock on the way, this situation is especially fragile. If the Iran war continues, higher fuel costs or shortages of goods could squeeze businesses and consumers, leaving the labor market without a buffer to absorb the shock. Meanwhile, due to inflation concerns that may weaken the certainty of rate cuts, the Fed’s policy room is also more limited. (Source: ChainCatcher)