Economic Views

The Goldilocks jobs market continues in the US

Janet Mui

Janet Mui

Global Economist, Cazenove Capital

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The US employment report for April reaffirmed a “Goldilocks” jobs market – not too hot to create inflation and not too cold to spark slowdown fears. The unemployment rate fell to the lowest in 49 years while wage growth remained solid but contained.

Nonfarm payrolls rose by an impressive 263,000 in April, well above estimates and after a downwardly revised 189,000 in March.

The unemployment rate surprisingly fell to 3.6% from 3.8%, primarily due to a fall in the labour force. Wage growth remained steady at 3.2% year-on-year and came below estimates despite the fall in the unemployment rate.

This suggests there is still slack in the labour market and that the robust labour market can support US activities without fuelling too much inflation.

Today’s “Goldilocks” report, amongst other recent US activity and inflation data, should support the Federal Reserve’s stance to keep interest rates on hold.

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