Jobs Report Sparks Concern Over Profit Margins
Annalisa Burgos
It’s no surprise U.S. markets are not exactly rallying on the better-than-expected March jobs data, one analyst told Sue Herrera on “Power Lunch.”
“The stock market might be a little bit unhappy that this latest jobs report practically rules out a Federal Reserve interest rate anytime soon, in part because of faster wage growth that eventually could help squeeze profit margins,” said John Lonski, chief economist for Moody's Investors Service.
The U.S. Labor Department said Friday that 180,000 new jobs were created in March, and the unemployment rate fell to 4.4%. Economists had expected a gain of 135,000 jobs. The Dow Jones Industrials rose moderately in midday trading.
“If the labor market tightens further, wage growth will accelerate, and that’s not going to sit well with policy makers. And a lot of equity investors will not like that when they notice the degree to which this begins to squeeze margins,” Lonski said.
