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Fed officials, new data, start lowering expectations for U.S. jobs in May

EconomyMay 22, 2021 06:26AM ET
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2/2 © Reuters. FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan speaks during an interview in his office at the bank's headquarters in Dallas, Texas, U.S. January 9, 2020. REUTERS/ Ann Saphir/File Photo 2/2

By Ann Saphir and Howard Schneider

WASHINGTON (Reuters) - Federal Reserve officials and new Dallas Fed data have begun lowering expectations for May jobs growth in the United States as business hiring plans continue to outrun the supply of people able or willing to work.

Dallas Federal Reserve president Robert Kaplan said Friday that hiring difficulties have continued through May, and will likely lead to another weak jobs report following the lower-than-expected 266,000 positions added in April.

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 and a lack of child care, and “these structural issues, which we saw in the report for April...all those tensions are not going to go away" immediately, Kaplan said at a Dallas Fed conference on technology. "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 million or more new jobs were added to U.S. payrolls, helping the country quickly claw back the 8.2 million positions still missing from before the pandemic.

St. Louis Fed president James Bullard earlier this week however called that figure "hyped up," and said a "more realistic" expectation was for perhaps half a million 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 and the economy revs up for what may be the strongest year of economic growth since the early 1980s.

Philadelphia Fed President Patrick Harker on Friday became the second Fed official, along with Kaplan, to urge a faster start to talks over when and how quickly to reduce the central bank's $120 billion in monthly bond purchases.

"It is something that, in my mind, we should start to have a conversation about sooner rather than later," Harker said at a virtual event organized by the Washington Post.

Atlanta Fed president Raphael Bostic and Richmond Fed president Thomas Barkin, speaking at the same event with Kaplan, both stuck to their positions that more hiring needs to take place before they'd be ready to discuss a bond purchase "taper."

"Right now we are not in a position where that’s in play for moves,” Bostic said, a view that is currently a near consensus at the Fed, even as some begin to warn of a possibly overheating economy.

Fed officials, new data, start lowering expectations for U.S. jobs in May
 

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Comments (14)
Victor Cuello
Victor Cuello May 23, 2021 8:03PM ET
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The talk about people not making enough is mostly a cheap excuse. No company can compete with the "free money" that the government is "giving away". why would someone work if they can just sit at home and collect a check, even if that check is a bit less or just around the same that they were making while working. Another point is the high income taxes the lower income people are paying. A person in NYC making $700/week only gets just over $500 after taxes. I KNOW THIS. now are now receiving just about the same, tax free. I don't blame them, but this lack of workers is killing small businesses. I KNOW THIS.
James Andrews
James Andrews May 23, 2021 4:48PM ET
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Socialists don't want to work. These corporations are going to regret supporting it very soon. Get these lazy leeches back to work!
Steve Austin
Steve Austin May 22, 2021 1:35PM ET
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There should be tax breaks for people who work over 2,000 hours a year and make less than 44k.
Roger Miller
Roger Miller May 22, 2021 1:02PM ET
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We’re still down 8.2 millions jobs while inflation, the stock markets, and commodities are at highs. This is obviously not a free market economy.
Suzy Carriere
Suzy Carriere May 22, 2021 9:47AM ET
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Businesses are telling us they got plenty of demand but they are unwilling to pay a decent worker wage either skilled or unskilled so they are unable to fill their needs."
Roger Miller
Roger Miller May 22, 2021 9:47AM ET
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Take away the extra handouts away added on sunce the pandemics, only then can you make the “decent wage” argument.
Kaveh Sun
Kaveh Sun May 22, 2021 9:42AM ET
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Why work? In Ca, average u get about 1800 plus Biden 1200usd extra on top of state benefits for not working.
Roger Miller
Roger Miller May 22, 2021 9:42AM ET
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The math is so simple yet the left chooses to ignore it.
Steffen vdm
Steffen vdm May 22, 2021 8:37AM ET
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Lowering expectations to cash as much as possible when the data is being released. Data, surprisingly, will be better than expected. Doesn't really matter if data is good or bad. What matters is what was expected. Managing expectations has become a lucrative business
Wayne Gillispie
Wayne Gillispie May 22, 2021 8:20AM ET
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The US CEO’s and govt leaders have outsourced 95% of manufacturing jobs to Asia and Mexico over the last 23+ years. We only need so many overpaid millionaire CEO’s, executives in suits and salespeople. We have enough in service and hospitality. Now we are reaping what our greedy country has sowed. See how those profits and stocks look when you can’t manufacture your own goods. When you have sold equipment to and trained someone else to make your goods 12,000 miles away. You really thought they would comply with patents and not reverse engineer your goods???
danny Levine
danny Levine May 22, 2021 6:27AM ET
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prices going up everywhere. buy gold
Lars Hellman
LarsH May 22, 2021 5:32AM ET
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Pay them in BTC
Joseph Armour
Joseph Armour May 22, 2021 5:32AM ET
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Pay attention. Already governments are gearing up to not only outlaw cryptocurrency but also to strip away any wealth accumulated by individuals from it.
John Cerniuk
John Cerniuk May 22, 2021 5:32AM ET
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that will never happen.
Joseph Armour
Joseph Armour May 22, 2021 5:32AM ET
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and yet it already is
Michael Angelo
Michael Angelo May 21, 2021 4:41PM ET
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Looks like US is having a reality check about wages, among other issues revealed by the virus. The extra income people are getting shows, very clearly, that wages are low compare with standard living require in US, if not living in a get*to. Interesting, slave*r*y still actual.
Steve Lora
Steve Lora May 21, 2021 4:28PM ET
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Biden was 76% off in April. Fed and Reuters can only cover him up for so long. The most *****liberal can see he's after their bitcoin cap. gains..lol
William Bailey
William Bailey May 21, 2021 3:08PM ET
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Fed full of doggy waste . Lies ans deception . Fed outta ammo
John Snowden
John Snowden May 21, 2021 1:54PM ET
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I get the unskilled labor, a $1500 check can exceed their monthly expenses. But why skilled labor? Unless skilled labor was close to retiring (early) anyway and these checks just accelerated their plans... As a hiring manager, I can confirm, the labor shortage is real.
 
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