Labor market continues to tighten while prices move higher

Job growth was healthy again last month as workers continued to come back into the labor force. The unemployment rate moved closer to the pre-pandemic 50-year low while wages moved higher. The ISM manufacturing survey showed some slowing but remained well into expansion territory. The Fed’s favorite inflation indicator, the PCE price index, moved higher for February. Nothing fundamental has changed the outlook for the Fed to raise short-term interest rates again at the next FOMC meeting in early May.

What we learned last week:

• The employment-to-population ratio improved further
• Core PCE prices continue to rise

What we’re watching this week:

• ISM services index likely rose in March
• FOMC minutes could provide important details
• Initial jobless claims should remain low in an extremely tight labor market

Job growth was healthy again last month as workers continued to come back into the labor force. The unemployment rate moved closer to the pre-pandemic 50-year low while wages moved higher. The ISM manufacturing survey showed some slowing but remained well into expansion territory. The Fed’s favorite inflation indicator, the PCE price index, moved higher for February. Nothing fundamental has changed the outlook for the Fed to raise short-term interest rates again at the next FOMC meeting in early May.

View our informative commentary on the economy and financial markets – and find out what we’re watching for the week ahead: