On Friday morning, the government will reveal whether the recent signs of economic weakness have finally caused hiring managers to begin a retreat.
Washington — For more than a year, the Federal Reserve’s inflation fighters have been tightening their grip on the American economy with nine straight interest rate hikes. A key goal has been to slow the sizzling pace of hiring to help cool price pressures.
So far, the job market has refused to crack.
Hiring was surprisingly robust in both January and February, confounding forecasters. The unemployment rate remains barely above half-century lows.
The latest economic signs, though, increasingly suggest that an economic slowdown may be upon us. Employers are posting fewer job openings. More Americans are lining up for unemployment aid. Manufacturers are in retreat. America’s trade with the rest of the world is shrinking. And though restaurants, retailers and other services companies are still growing, they are doing so more slowly.
“The economic data seem to show the economy slowing down dramatically in the first quarter of 2023, bolstering the hopes of Fed officials that less demand will somehow bring inflation down,″ Christopher Rupkey, chief economist at the research firm FWDBONDS LLC, wrote this week.
On Friday morning, the government will reveal whether the recent signs of weakness have finally caused hiring managers to begin a retreat. The Labor Department is expected to report that employers added 240,000 jobs in March, according to a survey of economists by the data firm FactSet.
That would be down from 504,000 jobs in January and 311,000 in February. But it would probably still be too much for the Fed, which might conclude that the pace of hiring is still putting upward pressure on wages and prices and that further interest rates hikes are necessary.
For Fed officials, taming inflation is Job One.
