UBS On-Air: Market Moves Top of the Morning: April Jobs Report, Q1 GDP, & the week ahead
May 2, 2025
Brian Rose, Senior Economist Americas at UBS, shares insights on the latest U.S. employment report revealing positive growth in non-farm payrolls and labor market health. He discusses the first quarter GDP dip due to increased imports, highlighting the delicate balance of consumer spending and inflation. Looking ahead, Brian analyzes the upcoming FOMC meeting's potential impact on interest rates in light of labor market conditions and trade negotiations, particularly with China.
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Balanced U.S. Labor Market
- The U.S. labor market is currently in a balanced goldilocks zone with steady employment and moderating wage growth. - The ratio of job openings to unemployed workers is roughly one-to-one, indicating near full employment.
Q1 GDP Slump Masks Strength
- First quarter GDP declined 0.3% due to a record surge in imports in anticipation of tariffs. - Core consumption and investment remain healthy, signaling underlying economic strength despite noise in headline data.
Fed Rate Outlook Hinges on Labor
- The Fed will likely hold rates steady given strong labor market and inflation above target. - Rate cuts depend on labor market deterioration, with cuts more likely starting September amid tariff-related uncertainties.