Fed refocuses on job market as financial risks ease and inflation remains high
Federal Reserve officials counting on slower U.S. job growth to help them in their fight to lower high inflation will receive key employment and wage data on Friday, the last such download before their next interest rate decision in early May.
Economists anticipate what from the Fed’s perspective will be a middling result for March, a month marred by the largest bank failures since the 2007-2009 financial crisis, events that for a brief time at least shifted policymakers’ main attention from inflation to financial stability.
With the worst-case outcomes for the financial sector appearing to have been avoided, for now at least, the focus is returning to the real economy, including employment and wage growth seen likely to remain above what is considered consistent with the Fed’s 2% inflation target.
The details, such as expected tepid growth in manufacturing jobs and fewer industries adding jobs at all, may point to a deepening sense among businesses that the economy is slowing and consumer demand weakening, developments that could help ease the pace of price increases.
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