A record low unemployment rate and rising wages will likely keep the Fed on track to raise interest rates by another 25 basis points (bps) in May, as crisis risks decline as inflation concerns continue.
US job growth slows, something the Fed has anticipated by raising borrowing costs.
However, the economy added 236,000 jobs in March and averaged 345,000 a month in the first quarter, well above the level the central bank considers consistent with its 2 percent inflation target, the Labor Department reported.
For its part, the unemployment rate fell to 3.5%, from 3.6% in February, while average hourly wages increased 0.3 percent.
“Despite the weakening in the jobs numbers ahead of the nonfarm payroll report, job growth has yet to slump, though there are visible signs of a continued moderation,” said Kathy Bostjancic, Nationwide’s chief economist.
Bostjancic said the US central bank can be satisfied with the data, but added that it would support another rate hike in May, “which we think could be the last of the tightening cycle. Followed by a long pause.
In a new sign of easing inflationary pressures, the annual growth rate of wages fell to 4.2% in March, from 4.6% the previous month.
