"Federal Reserve mouthpiece": Low job growth may become the new normal, but it is particularly vulnerable in the context of war.

Nick Timiraos, a vocal advocate for the Federal Reserve, wrote that March saw 178,000 new jobs, reversing the sharp decline in February. The unemployment rate also fell to 4.3%. However, some details are less encouraging: wage growth for ordinary workers slowed to its lowest year-on-year rate in five years since the pandemic recovery. Averaging these two volatile months reveals a clearer underlying trend: an average of only 22,500 new jobs per month. Two years ago, 22,500 new jobs per month would have been alarming; now, that level might still be considered acceptable. Federal Reserve officials are still struggling to explain this shift. San Francisco Fed President Daly wrote on Friday, "It's not easy to get the public to understand that an economy with zero job growth is still consistent with full employment." This situation is particularly vulnerable to renewed supply shocks. If the war with Iran continues, high fuel costs or commodity shortages could squeeze businesses and consumers, leaving the labor market with little buffer to absorb the shock. Meanwhile, the Fed's policy space is also more limited as inflation concerns could weaken the certainty of interest rate cuts. (Jinshi)