The April jobs report fell way, way short of estimates – so how is that good news?
The way Wall Street works, a slower recovery means inflation spikes will be kept at bay. That’s where investors like it.
So, the stock market rocketed to record highs in the wake of the news because the Federal Reserve decision makers won’t need to be locking down its policies to ward off inflation.
If you’re out of work and don’t have a ton of money in the market? Then, yes, it’s not all good news.
As Friday rolled along, the S&P 500 and a good number of tech companies were up considerably and the Nasdaq surged more than a full percent.
Unemployment rose to 6.1% from 6.0% when it ws expected to go down. And with only 266,000 jobs added – the forecast had been for 1 million — Business Insider said it was the worst miss since 1998.
The chasm between expectations and reality on the jobs report fueled investors’ confidence that no inflation-driven measures are coming any time soon.
With a less-than-roaring economy, the prevailing belief is that the Fed now has a longer runway – according to the Insider story that means it will continue its monthly bond purchases of $120 billion and keep interest rates near zero.
The comments from Fed Chairman Jerome Powell earlier this year indicated things aren’t likely to change unless he’s able to see consecutive months’ worth of evidence that inflation is returning and that employment numbers are consistently rising.
One narrative among jobs analysts is that Americans receiving unemployment checks, including the supplement pay, are holding off committing to new jobs. That may be changing, with Friday’s message from the president of the U.S. Chamber of Commerce calling for a plan to end the $300 supplemental unemployment insurance.