“Fed officials have consistently maintained the view that inflation pressures should be transitory, and that the dismal April NFPs are a ‘fluke’ and do not expect the Fed to relax it dovish monetary policy“– Paul Ebeling
April’s disappointing employment report does not change the upbeat outlook for the US labor market due strong consumer demand, Fed officials said Wednesday.
“We still think, despite these frictions, that job growth will be strong,” Federal Reserve Bank of Dallas President Robert Kaplan said Monday in a TV interview, adding that employers reported problems in attracting workers despite offering higher wages. “You will see fits and starts like we saw here. We still think the trend is going to be strong job growth and recovery, particularly as leisure and hospitality sectors and others open up.”
A US Labor Department report published Friday showed just 266,000 Americans were added to NFPs in April, nearly 75% below the increase of 1,000,000 predicted by the forecasting consensus .
Mr. Kaplan’s confidence on the outlook for the US job market was echoed by other policy makers. San Francisco Fed chief Mary Daly declared: “I remain bullish about the future. But we’re not there yet, and we’re going to have some fits and starts.”
Charles Evans of Chicago said he was optimistic that despite the sluggish April report, the US labor market is “going to get back up to very strong numbers” in coming months.
“Demand for businesses to hire is greater than the growth in employment,” he said. “We want to incentivize people to come back to the jobs they left or other jobs.”
Wednesday, the benchmark US stock market indexes finished at: DJIA -681.50 to 33587.66, NAS Comp -357.75 to 13031.71, S&P -89.06 to 4063.04, the Russell 2000 (-3.3%) underperformed
Volume: Trade on the NYSE came in at 1.1-B/shares exchanged
HeffX-LTN’s overall technical outlook for the US major stock market indexes is Neutral to Bullish in here.
Gold and other commodity-related groups continue to show the most strength, especially as USD trends lower.
Bottom line: The equity market’s are seeing profit taking across the board as they consolidate off of their record highs leading to buying opportunities.
- DJIA +9.7% YTD
- S&P 500 +8.2% YTD
- Russell 2000 +8.1% YTD
- NAS Comp +1.1% YTD
Looking Ahead: Investors will receive the Producer Price Index for April and the weekly Initial and Continuing Claims report Thursday.
Have a healthy, Keep the Faith!