MARCH 8, 2021 – A SOLID JOB REPORT FOR FEBRUARY
There is anticipation for a stronger recovery this spring as hiring is rising at restaurants, other hospitality businesses. The February jobs reports came out last week reporting the US economy added 379,000 new jobs, the January data was revised up to 166,000 jobs created. The unemployment rate edged down to 6.2 percent in February, far lower than the peak of 15 percent at the peak of the pandemic. However, the US is reporting 9.5 million less jobs than a year ago. The Congressional Budget Office has stated it will take until 2024 to fully regain the jobs lost in the pandemic, which leads into the Fed’s reluctance to raise rates in the short term.
Fed Chair Jerome Powell spoke last Thursday at the Wall Street Journal Jobs Summit. He confirmed the Fed’s intention to keep their easy-money policy in place despite forecasts of a strengthening economy and inflation growth this year. When asked about the rise in long-term rates, he answered the Fed is looking at ”a broad range of financial conditions rather than a single measure”. Some are expecting a rapid rise in inflation once the economy re-opens, which in the past, would have warranted a rate increase. The Fed doesn’t expect to raise the fed-funds rate until three conditions are met. First, a labor market at maximum strength; second, inflation at the 2 percent target; third, an expectation inflation will remain at or above 2 percent.