Richmond Fed President Tom Barkin said the decline in the unemployment rate was welcome and described job growth as modest but stable. He also noted that hiring remains concentrated in healthcare and AI, leaving the overall picture uncomfortably narrow, adding that demand still looks healthy, while progress on inflation will take time, keeping upcoming data in focus.
Key Quotes
Drop in the unemployment rate is welcome.
Hard to find firms outside of healthcare or ai who are hiring.
Job growth is modest, very much in line with low-hiring and low-firing continuing.
The narrowness of hiring is “uncomfortable.”
Do not hear the cost of interest being cited as a major problem for businesses.
In theory lower labour supply and lower job growth is a reasonable balance.
Not clear whether the job market will break towards more hiring or more firing.
Do believe there is a change in productivity, not just a data artefact.
Demand growth still seems quite healthy.
Coming data will be important; it is still not trivial that the Fed is still trying to catch up with gaps from the shutdown.
One of the benefits of the Fed system is having regional officials “outside the bubble” of Washington, D.C
On the housing market the real solution is supply; there need to be more houses built.
Jobs data can now be taken at face value.
On inflation, it will take more time to make up for missing reports from last fall.
