"New Federal Reserve News Agency": Non-farm data reduces the possibility of a rate cut in June

On Friday, renowned financial journalist Nick Timiraos, known as the "New Federal Reserve Correspondent," stated that the non-farm payroll report for April has reduced the likelihood of the Federal Reserve cutting interest rates in June, as only one more employment report will be released before then.

Timiraos pointed out that Federal Reserve officials generally indicate that a clear sign of rising unemployment will be needed for a rate cut. Since the April employment report showed almost no widespread decline in job positions, Federal Reserve officials are likely to adopt a wait-and-see attitude at next week's policy meeting, including making almost no comments suggesting readiness to cut rates at the mid-June meeting.

Data released earlier that day showed that the U.S. non-farm payrolls increased by 177,000 in April, compared to an expectation of 138,000, while the growth data for the previous two months was revised down, with the total number of jobs in February and March being 58,000 less than previously reported. The U.S. unemployment rate for April was 4.2%, unchanged from expectations and the previous value of 4.2%. The average hourly wage in the U.S. increased by 3.8% year-on-year in April and by 0.2% month-on-month, both below expectations.

After the release of the U.S. non-farm payroll data, traders still expect the Federal Reserve to cut rates nearly four times this year, with the total expected cut amounting to about 85 basis points, down from the pre-report expectation of about 90 basis points.

Timiraos' Data Commentary on X Platform

Timiraos tweeted on the X platform that the unemployment rate for April, calculated without rounding, was 4.187%, compared to 4.152% in March.

Over the past six months, the U.S. economy has added an average of 193,167 jobs per month.

The total employment index is a good monthly indicator of nominal income growth and is highly correlated with nominal GDP growth. In April, this index grew by 5.3% year-on-year and has remained stable over the past year, currently returning to levels seen in 2018-2019.

In April, the number of permanent job losses reached 1.9 million, setting a new cycle high, accounting for 1.1% of the civilian labor force.

Over the past six months, employment in the goods-producing sector has been positive:

Timiraos pointed out that some of Trump's advisors had stated that previous job growth was "beautified" because it mainly came from government sectors or hiring in healthcare and education that were unrelated to the economic cycle. However, this was not the case in March and April. After excluding hiring in government, education, and health services, job growth in these two months still reached 96,000 and 97,000, respectively.

Recently, the number of people who were previously not in the labor market (neither working nor looking for work) and have turned to employment has increased, a trend that coincides with the Federal Reserve's interest rate cuts last fall.