Moreover, the unemployment rate has remained around its 50-year low despite an increase in the labor force participation rate to the highest level since the start of the Covid downturn. While the March NFP gain was the slowest since the end of 2020, it was about equal to the 10-year median gain and above the median gains for 11+ years, suggesting no significant concerns. Nonfarm payrolls (NFP) rose by 236,000 for March, with the U-3 unemployment rate slipping back to a historically low 3.5 percent. The latest job market data indicate still-tight conditions, although growth continues to slowly trend lower. It was taken over by the FDIC and its assets sold to JPMorgan Chase ( JPM )).
(Late-breaking development: First Republic Bank ( FRC ) has become the second biggest bank failure in US history.
And it may already be too late to escape at least a modest downturn. Even if the end of tightening is near, outright easing by the Fed seems unlikely as long as inflation is much too high.
How long can this discrepancy persist, and which set of indicators (current or leading) will eventually prove to be a more accurate reflection of what will occur? Inflation remains well above the Federal Reserve’s long-term goal, suggesting still more tightening ahead. Leading indicators of recession continue to worsen, as do many financial/credit metrics, but the economy stubbornly refuses to decline.
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