The United States labor continues to show its strength and resistance. Despite the uncertainty generated by Donald Trump’s economic and commercial policy, the world’s first economy continued to create employment at a good pace in May, according to the dependent data of the Labor Department. The economy generated 139,000 jobs and the unemployment rate stood at 4.2%, without variation.
The forecasts of the economists pointed to the creation of 125,000 jobs in May, the month in which Trump declared the so -called reciprocal tariffs. The numbers of March and April, however, have been reviewed downwardly. With the new estimates, in March 120,000 jobs were created (and not the 185,000 before calculated), while in April the figure was 147,000, 30,000 less than those said initially.
Trump’s tariffs, causing one to try to dodge the levies. The changing and uncertain nature of import taxes hinders economists even make predictions, but there is a relative consensus in which the labor market will be cooled throughout the year.
Adriana D. Kugler, counselor of the Federal Reserve, underlined that “resistance of the labor market” on Thursday. “Tomorrow the report on May use will be published, but the available data indicate that employment has continued to grow and that the supply and demand for labor remains in relative balance,” he said, anticipating the meaning of the data.
Data on job offers and renunciations of the month of April published this week also point to a resistant labor market, but that is cooling. The vacancy rate, which measures the demand for workers, was 4.4 %, below the maximum of 7.4 % registered three years ago and practically at the same level as just before the pandemic. The renunciation rate, an indicator of workers’ confidence in finding a job, has remained in a narrow range of between 1.9 % and 2.2 % since December 2023, only slightly below the average level of 2019.
With that panorama of a solid labor market and uncertainty about the inflationary impact of tariffs, the Federal Reserve is not in a hurry to reduce interest rates. He prefers to take time until the panorama is clarified, but some of its members already begin to point in the direction of new cuts.
Last Sunday, in a speech in seul (South Korea), Fed Christopher Waller counselor said he waits for type cuts later in the year if the average tariff type is around 10%. “Given my conviction that any inflation induced by tariffs will not be persistent and that inflation expectations are anchored, support that the effects of tariffs on short -term inflation are ignored when setting the monetary policy rate,” he argued.
“Fortunately, the solidity of the labor market and the evolution of inflation until April give me more time to see how commercial negotiations develop and how the economy evolves. Assuming that the effective tariff type is located near my stage of lower tariffs [en torno al 10%]that the underlying inflation continues to advance towards our goal of 2% and that the labor market remains solid, would support interest rates at the end of this year, ”he added.
Investors do not expect interest rates at the FED meeting of June 18 or in July 30, but they are inclined to think that there will be a cut of 0.25 percentage points on September 17, from the current level of 4.25%-4.50%, which has not been moved since December.
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