TechFlow News, April 4: Nick Timiraos, often dubbed the “Fed’s mouthpiece,” wrote that nonfarm payrolls increased by 178,000 in March—reversing February’s sharp decline. The unemployment rate also fell to 4.3%. However, some details are less encouraging: wage growth for average workers slowed to its lowest year-on-year pace since the post-pandemic recovery began five years ago. Averaging these two highly volatile months reveals a clearer underlying trend: just 22,500 jobs added per month on average. Two years ago, adding only 22,500 jobs monthly would have triggered alarm; today, such a level may still be deemed acceptable.
Fed officials continue struggling to explain this shift. San Francisco Fed President Mary Daly wrote on Friday: “It is not easy for the public to understand how an economy with zero net job growth can still be consistent with full employment.” This situation is especially fragile amid renewed supply shocks. If the Iran conflict persists, higher fuel costs or goods shortages could squeeze both businesses and consumers—leaving the labor market with little buffer to absorb such shocks. Meanwhile, concerns about inflation may erode certainty around rate cuts, further constraining the Fed’s policy space. (Jinshi)
