From our colleagues at our sister company, Argent Trust:
Announced this morning, the economy added 428,000 jobs in April, more than expected. The Manufacturing and Transportation & Warehousing industries were strong, while the Construction and Mining & Logging industries were relatively weak. The Unemployment Rate held steady at 3.6% and the Labor Force Participation Rate at 62.2% is slightly lower than the previous month. Average Hourly Earnings increased 5.5% on an annual basis as expected, and Average Weekly Hours were 34.6 which is the same as the previous month. Overall, a positive headline number that was more than expected coupled with an unemployment rate at the same low level as the previous month. Meanwhile, the persistent elevated reading of average hourly earnings connotes the difficulty for some companies to find and attract workers even as the economy moves further beyond the pandemic. Given these characteristics of a tight labor market, the Federal Reserve should be on track to continue with their plan to restrict policy through interest rate increases and balance sheet reductions in the months ahead. Meanwhile, equity markets have been volatile in recent days as markets digest the comments following this week’s Federal Reserve meeting and the impacts of higher interest rates. In all, U.S. 10-year treasury yield is little-changed following the report, remaining above 3%, and equity futures are lower as we head into the market open.
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