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Macro Since March FOMC - Labor: ... But Also Strong Supply [2/3]

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  • However, the unemployment rate was as expected after a bounce in household employment only just exceeded very strong labor force growth.
  • Specifically, household employment surged 498k after three heavy monthly declines, whilst the labor force increased +469k after +150k in another sign of strong labor supply.
  • It meant the unemployment rate came in at 3.83% (cons median 3.8 but average 3.83) and mostly consolidated its surprise 0.2pps increase to 3.86% back in Feb. Whilst we were surprised by the strength of payrolls growth, this pause in the unemployment rate was in line with our view.
  • However, with the FOMC’s median participant forecasting only a small rise in the unemployment rate to 4.0% for 4Q24, and with relatively little change thereafter, any upward surprises in the unemployment rate over the next couple months could still generate a notably dovish market reaction. This is of note after the recent sharp move lower in NFIB hiring plans.

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  • However, the unemployment rate was as expected after a bounce in household employment only just exceeded very strong labor force growth.
  • Specifically, household employment surged 498k after three heavy monthly declines, whilst the labor force increased +469k after +150k in another sign of strong labor supply.
  • It meant the unemployment rate came in at 3.83% (cons median 3.8 but average 3.83) and mostly consolidated its surprise 0.2pps increase to 3.86% back in Feb. Whilst we were surprised by the strength of payrolls growth, this pause in the unemployment rate was in line with our view.
  • However, with the FOMC’s median participant forecasting only a small rise in the unemployment rate to 4.0% for 4Q24, and with relatively little change thereafter, any upward surprises in the unemployment rate over the next couple months could still generate a notably dovish market reaction. This is of note after the recent sharp move lower in NFIB hiring plans.