Another data point from the U.S. Bureau of Labor Statistics indicates that there’s no economic slowdown in sight, or at least not on the jobs front.
The latest figures has the unemployment rate dropping to a nearly 50-year low, and follows the surprise report from a week ago on first quarter gross domestic product growing at 3.2 percent versus the 2.5 percent rate that many economists were expecting. Total nonfarm payroll employment rose by 263,000 in April, and the unemployment rate is now 3.6 percent, the lowest since December 1969.
There’s been concern that the U.S. economy is slowing down, but the two government data points suggest otherwise. And the Federal Reserve has held its position to keeping interest rates unchanged with a wait-and-see stance. However, Fed chairman Jerome Powell‘s use of the word “transitory” in Wednesday’s press conference had some wondering if the Federal Reserve might instead begin to raise rates at the beginning of 2020.
The Conference Board’s Gad Levanon, chief economist, North America, said, “In the past month, most economic releases came out better than expected, suggesting that the U.S. economy will continue to grow above its long-term two percent trend through at least the end of the year, with love near-term recession risks. Today’s employment growth strengthens this point of view…. The recovery in the U.S. economy and the ongoing labor market squeeze are likely to further shift the Federal Reserve away from considering a rate cut in 2019.”
Labor market: While Friday’s report from the Bureau of Labor Statistics show strengthening on the overall jobs front, much of those gains were in the professional and business services sector, which added 76,000 jobs in April. Construction employment grew by 33,000 and health care saw 27,000 jobs added. In contrast, employment in the retail trade was down by 12,000 jobs. According to the government data, jobs at apparel and accessories retailers fell by 6,600, while those at department stores were down by 4,700.
Earnings: Lenzing will report first-quarter results on Wednesday, while Tapestry Inc. will report third-quarter results on Thursday.
Events: Sourcing Journal will host its Sourcing Summit: Hong Kong on Wednesday. The theme is on “Accelerating Change: What’s New, Now & Next.”