"Fed whispers": Low employment growth may become a new normal, but is especially fragile in a war background.

The Fed's Listening Device In his article, Nick Timiraos pointed out that there were 178,000 new jobs added in March, reversing the sharp decline in February. The unemployment rate also dropped to 4.3%. However, some details are not very optimistic, as wage growth for ordinary workers has slowed to the lowest year-on-year increase since the pandemic recovery began five years ago. By averaging these two months with large fluctuations, a potential trend can be seen more clearly: an average of only 22,500 new jobs added per month. Two years ago, adding 22,500 new jobs per month would have been enough to raise concerns; now, this level may still be considered acceptable. Federal Reserve officials are still trying to explain this change. Mary Daly, President of the San Francisco Fed, wrote on Friday, "It is not easy to make the public understand that an economy with zero job growth is still consistent with full employment." This situation becomes especially fragile when new supply shocks hit. If the Iran war continues, high fuel costs or shortages of goods squeeze businesses and consumers, the labor market will lack the cushion to absorb the impact. At the same time, due to concerns about inflation potentially weakening the certainty of interest rate cuts, the Fed's policy space is also more limited.