Aurelia Butler

The Fed raised its benchmark rate on Wednesday for what it signaled could be the last time before an extended pause to allow time for its policy tightening to date to wring high inflation from the economy. Traders had been betting that the Fed would reverse course and start easing the policy rate, now in the 5.00%-5.25% range, by September, but after the jobs report they see any cuts delayed until later in the year. More

WASHINGTON (Reuters) – U.S. employers boosted hiring in April while raising wages for workers, pointing to sustained labor market strength that could see the Federal Reserve keeping interest rates higher for some time.Nonfarm payrolls increased by 253,000 jobs last month, the Labor Department’s closely watched employment report showed on Friday. Data for March was revised lower to show 165,000 jobs added instead of 236,000 as previously reported. Economists polled by Reuters had forecast payrolls rising by 180,000. Payrolls are well above the 70,000-100,000 monthly increase needed to keep up with growth in the working-age population. The unemployment rate fell to 3.4% from 3.5% in March. Average hourly earnings gained 0.5% after advancing 0.3% in March. Wages increased 4.4% on a year-on-year basis in April after climbing 4.3% in March. Other measures such as the Employment Cost Index and the Atlanta Fed’s wage tracker also show momentum. Wage growth remains too strong to be consistent with the Federal Reserve’s 2% inflation target.The Fed raised its benchmark overnight interest rate by another 25 basis points to the 5.00%-5.25% range on Wednesday, and signaled it may pause the U.S. central bank’s fastest monetary policy tightening campaign since the 1980s, though it kept a hawkish bias. The Fed has hiked its policy rate by 500 basis points since March 2022.Some economists, however, believe that the labor market is overstating the health of the economy, pointing to the divergence between consumer spending and job gains as well as a continued decline in worker productivity. Consumer spending stalled in February and March. Productivity has declined on a year-year basis for five straight quarters, the longest such stretch since the government started tracking the series in 1948.Economists also noted that job growth was becoming more concentrated in the leisure and hospitality industry as well as state and local governments, sectors where employment remains below pre-pandemic levels.With risks of a recession mounting because of the punitive borrowing costs and tighter credit conditions amid financial market stress, the hiring landscape could change quickly.For now, the general consensus is that the economy will continue to create jobs at least until the fourth quarter. More

Shares of the Leawood, Kansas-based company, which operates over 900 theaters globally, rose nearly 4% in trading before the bell. The stock, which is a favorite of retail investors, has risen more than 45% so far this year.The company in its earnings report also signaled a boost to its current quarter from the release of the much-awaited “The Super Mario Bros. Movie” and said it expected “The Little Mermaid”, “Guardians of the Galaxy Vol. 3” and “Spider-Man: Across the Spider-Verse” to be a box-office driver for the remainder of the year.”The first quarter North American box office easily surpassed 2022 by some 29%, totaling more than $1.7 billion,” CEO Adam Aron said, adding that the European market showed strong recovery to reach pre-pandemic levels, compared with the United States.Movie theater operator Cinemark Holdings (NYSE:CNK) Inc also posted a 33% rise in first-quarter revenue earlier in the day, driven by a stronger-than-expected box-office performance.AMC has been trying different combinations to attract audiences to its theaters, including options where moviegoers can choose different seating options to meet their viewing preferences. Revenue for the quarter was $954.4 million, compared with analysts’ expectation of $948.5 million, according to Refinitiv IBES data. Net loss attributable to AMC Entertainment Holdings was $235.5 million, or 17 cents per share, during the quarter ended March 31 from a loss of $337.4 million, or 33 cents per share, a year earlier. More

US jobs growth was stronger than expected in April, providing a reminder of the resilience of the US economy even as the Federal Reserve signalled it was “getting close” to pausing its cycle of interest rate hikes.The US added 253,000 non-farm jobs last month, according to the Bureau of Labor Statistics, confounding expectations of a slowdown. However, the previous two months’ figures were revised sharply lower. The unemployment rate was also lower than expected at 3.4 per cent, compared to consensus forecasts of 3.6 per cent. Hourly wage growth strengthened to 0.5 per cent month-on-month. On a year-over-year basis, wages climbed 4.4 per cent.Wages are a key factor in inflation, particularly in the service sector, so economists and investors were closely monitoring the numbers for signs that higher interest rates are slowing the economy and bringing down inflation.The US central bank on Wednesday announced its tenth consecutive interest rate rise, lifting its benchmark federal funds rate to a range of 5 to 5.25 per cent. Fed chair Jay Powell said the labour market remains “extraordinarily tight”, but said “there are some signs that supply and demand . . . are coming back into better balance.”Data released earlier this week had supported Powell’s assessment, showing a sharper than expected drop in job openings to their lowest level since April 2021. Still, separate figures released last week highlighted that wage growth remained relatively strong, and inflationary pressures in several areas are high.

Powell stressed on Wednesday that it would still take some time to bring inflation down towards the Fed’s 2 per cent target, but investors have been betting that the central bank will quickly pivot to cutting rates, with the first coming as soon as July.Jack Janasiewicz, a portfolio manager at Natixis Investment Managers, said stronger than expected jobs or wage growth data this week “would reinvigorate the idea that the Fed is not done”.The two-year Treasury yield, which moves with interest rate expectations, jumped to session highs immediately following the publication of the data.He also highlighted the importance of data on the labour force participation rate, which counts the number of Americans who are employed or actively searching for a job. The rate has crept up in recent months after dropping dramatically early in the coronavirus pandemic, but was unchanged at 62.6 per cent in April. “There are reasons to believe people are coming back off the sidelines and increasing the supply of labour, which is what the Fed is looking for,” Janasiewicz said. “One of the better paths to a soft landing is increasing the supply of labour rather than seeing people get laid off.”Asked on Wednesday about the tension between the Fed’s dual mandates of bringing down inflation while maximising employment, Powell said: “Right now, we need to be focusing on bringing inflation down. Fortunately, we’ve been able to do that so far without unemployment going up.” More