Dow shot up 224, advancers over decliners 5-2 & NAZ jumped 185. The MLP index added 1 to the 188s & the REIT index rose 4+ to 431. Junk bond funds saw limited demand & Treasuries were bid higher. Oil recovered 1+ to 65 & gold went up 5 to 1882.
AMJ (Alerian MLP index tracking fund)
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Federal Reserve officials & new Dallas Fed data have begun lowering expectations for May jobs growth in the US as business hiring plans continue to outrun the supply of people able or willing to work. Dallas Federal Reserve pres Robert Kaplan said that hiring difficulties have continued thru May, & will likely lead to another weak jobs report following the lower-than-expected 266K positions added in Apr. A survey published by the Dallas Fed earlier in the day, meant to provide a mid-month check on national employment trends, pointed to weakening job growth as well. That has been attributed to a number of factors including ongoing unemployment benefit payments & a lack of child care, & "these structural issues, which we saw in the report for April...all those tensions are not going to go away" immediately, Kaplan said. "We think you are going to see another odd or unusual report...Businesses are telling us they got plenty of demand but they cannot find workers either skilled or unskilled." Fed officials had hoped to see a "string" of months in which a M or more new jobs were added to US payrolls, helping the country quickly claw back the 8.2M positions still missing from before the pandemic. St Louis Fed pres James Bullard earlier this week however called that figure "hyped up," & said a "more realistic" expectation was for perhaps ½M jobs a month. The comments highlight a growing dilemma at the Fed as it wrestles over how long to keep emergency levels of economic support in place as the pandemic ebbs & the economy revs up for what may be the strongest year of economic growth since the early 1980s.
Fed officials, new data, start lowering expectations for US jobs in May
Pres Biden seems unperturbed by last month's jobs report, writing that the US economy is expected to grow faster than it has in
40 years. "Since we took office, we’ve gone from an economy in crisis to one that
is projected to grow faster than it has in nearly 40 years," the
pres said. "That’s progress. Let’s keep it going." Economists had forecast the US would gain nearly 1M jobs in Apr, as it did in Mar, but instead it gained 266K. The
unemployment rate unexpectedly rose to 6.1% — while it's still well
below the Apr 2020 peak of 14.7%, it's about twice the pre-crisis
level, the Labor Dept said in its monthly report.
Economists expected the report to show that
unemployment fell to 5.8%. The figure marks a significant drop from Mar's downwardly revised number of 770K & Feb's upwardly revised 536K. There are still 8.2M fewer jobs than there were last Feb, before the crisis began. Average
hourly earnings rose 0.7% in Apr from a month earlier, to $30.17, the
jobs report showed, & so did inflation - the consumer price index
rose a remarkable 4.2%. The Biden administration has maintained that inflation will be temporary and, as Biden said in an address on the numbers, adding jobs to the economy is a "sprint - not a marathon. "You might think we should be disappointed," Biden said of the numbers,
but claimed the "American Rescue Plan," which passed in late Mar,
"was designed to help us over the course of a year—not 60 days." The
American Rescue Plan pumped up unemployment benefits with $300 per week
in federal funding, a move Reps have said is detracting those
receiving benefits from taking jobs where they might make less. It also
offered $1400 checks to Ms of Americans.
Biden touts economic 'progress'... but the stats don't add up
Federal Reserve Governor Lael Brainard pressed the case for a digital $, saying that a cryptocurrency backed by the central bank could provide a variety of benefits. Providing financial services to the nearly 1 in 5 Americans considered “underbanked” is one of the advantages Brainard cited in a speech. She also cited the safety of a Fed-backed system, as well as improvements in efficiency & cross-border payments, or transactions between people in different countries. While stressing the importance of moving forward carefully, Brainard said the Covid-19 pandemic strengthened the need for a system in which a broad swath of the public has access to well-regulated digital money. “The Federal Reserve remains committed to ensuring that the public has access to safe, reliable, and secure means of payment, including cash,” she said. “As part of this commitment, we must explore — and try to anticipate — the extent to which households’ and businesses’ needs and preferences may migrate further to digital payments over time.” Those comments come days after Fed Chair Jerome Powell announced that the central bank this summer would be releasing a working paper that addresses multiple issues involving Central Bank Digital Currencies (CBDC). The Boston Fed & MIT have launched a joint project in which they will set up a hypothetical model, & several other Fed districts also are involved with research of their own. Essentially, the development of the CBDC would give consumers broader access to electronic currency, the likes of which have been popularized with the use of bitcoin & its myriad peers. China's central bank has been moving forward with its own project as have various others around the world. Brainard said the pandemic presented an example of how important developing a Fed-backed currency could be.
Fed’s Lael Brainard pushes digital dollar as central bank currency race heats up
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