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Wells Fargo: Payrolls Keeps 50bp June Hike On Track

US OUTLOOK/OPINION
  • Wells Fargo describe nonfarm payroll growth as “barreling ahead” in April, with a 428k increase more or less in line with consensus after modestly negative revisions.
  • The 0.2pt drop in the participation rate was disappointing but it follows a string of solid increases and it’s only one month.
  • Wage growth looks to be showing some tentative signs of peaking on a year-ago basis but is still running more than double its average pace in the 2010s and the moderation will likely be slow.
  • It will be difficult to cool the labor market enough without tipping the economy into recession but in the near term the FOMC clearly has more policy tightening to do, starting with another 50bps in June.

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