May 8, 2023
The continuing strength in jobs creation having been noted, there is another story that needs telling. It is hard to find a consistent narrative in the reported U.S. employment numbers. came out at the beginning of this week and it indicated that the total number of job openings in the U.S. economy slid considerably in March, down by nearly -400,000 month to month and behind by -2.4 million from a year ago.
The Federal Reserve seems relatively pleased about the manner in which the overall economy is slowing and the labor market is losing some of its froth. It just raised the range for the federal funds rate by another 25 basis points , but it also indicated that the new level between 5.00% and 5.25% might be where the hikes end.
The federal funds rate has risen by five percentage points since March of last year. As a consequence, inflation has lost some of its swagger. The year-over-year change in the Consumer Price Index has receded from +9% to +5%. The price of gasoline is now -17.4% y/y. On the plus side for consumers, a drop in the price of gasoline, because it is such a large part of so many people’s spending habits, is like a tax cut.