April Jobs Report Commentary from MBA's Mike Fratantoni
The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in April:
“The job market stayed surprisingly strong in April with a gain of more than 250,000 jobs and a drop in the unemployment rate back to 3.4%. Job growth for the prior two months was revised downwards, but on net, the labor market is stronger than expected, including wage growth up 4.4% over the past year. This rate of growth is likely faster than would be consistent with the Federal Reserve’s 2% inflation target.
“As was the case in recent months, job growth remains concentrated in just a few sectors, particularly health care and hospitality. Although we have seen several public layoff announcements, the job growth in these few sectors continues to offset losses in technology and other industries, including the mortgage market.
“A solid job market will provide support to the housing market. However, the inflationary pressures from this strong wage growth will likely prevent the Federal Reserve from cutting rates any time soon, even if they now are at the peak for this rate cycle.”