As the Incoming Data Turns
The Fed’s job is almost comically complicated.
This is as succinct a summary of the employment situation as you’ll read, courtesy of Sam Goldfarb of The Wall Street Journal:U.S. job growth burst past expectations last month even as the unemployment rate edged up to 4%, presenting a mixed view of a labor market that has generally been cooling while staying hotter than many anticipated.The labor market is “cooling,” and the labor market is also “hotter than many anticipated.”
And in between is the Federal Reserve.
The unemployment rate ticked up to 4 percent in May from 3.9 percent in April, and the employment-to-population ratio dipped to 60.1 percent.
It’s the first time the unemployment rate has been at 4 percent in more than two years; it’s risen from 3.4 percent in April 2023.
But the US economy added 272,000 jobs last month, beating a consensus forecast of 185,000. And average hourly earnings were up 4.1 percent year over year, also exceeding expectations.
Then it’s Big Wednesday.
The Bureau of Labor Statistics will release Consumer Price Index data for May at 8:30 a.m. ET. The consensus sees headline CPI easing to 0.1 percent from 0.3 percent month over month and steady at 3.4 percent year over year.
Core CPI, which excludes food and energy prices, was steady at 0.3 percent month over month. Core CPI ticked down to 3.5 percent from 3.6 percent year over year.
And at 2:00 p.m. the quiet period will break and we’ll hear from the Federal Open Market Committee.
Nobody expects the Fed to make any meaningful move this week. We may hear things in the official policy statement, and we’ll get excited about the new dot plot.
But all of it will be a variation of “we continue to monitor the incoming data.”