May 6, 2019 — Surge in New Jobs Created, Unemployment Rate Falls

MAY 6, 2019 – SURGE IN NEW JOBS CREATED, UNEMPLOYMENT RATE FALLS

The Labor Department announced Friday 263,000 new jobs were created in April, beating expectations for 190,000 new jobs.  The unemployment rate is now at 3.6 percent, near a 50-year low. Wages grew at 3.2 percent, slightly below expectations for 3.3 percent.

Much of the economic data released recently has been positive.  The US economy has added jobs for a record 103 straight months. GDP rose 3.2 percent in the first quarter; productivity was up 3.6 percent in the quarter, its best gain in five years.  Home sales were up 2.8 percent in March.

The Fed met earlier last week, where they announced they would not be reducing interest rates going against pleas from President Trump to cut rates by a percentage point. A continuing strong economy shows rates, at their current levels, are not hindering growth. Even with last week’s data release, the current pace of wage growth unlikely to create inflation pressure.  Fed Chairman Powell said current indications point to a prolonged period of holding pat on increases or decreases in rates.

But if you believe in the economy, data may force the Fed’s hand and rates will start moving up again.  The opportunity to lock in low rates through interest rate swaps exists now, should you choose to act.