US Jobs Report Increases Likelihood of Fed Hike in June

Published on08 MAY 2017

Goldman Sachs Chief Economist Jan Hatzius says April’s strong US employment report, which showed an increase of 211,000 jobs, makes it almost certain the Federal Reserve will raise interest rates in June to keep the labor market from overheating.

Jan Hatzius
Chief Economist and Head of Global Economics and Markets Research, Global Investment Research, Goldman Sachs

“The most important aspect of the report [is] that we are now at full employment,” he says, a notion supported not only by the decline in the unemployment rate to 4.4% but also falling “underemployment” and an increase in the employment-to-population ratio.  He sees a 90% chance the Fed will raise rates at its next meeting to help slow down jobs growth and prevent a serious overshooting of full employment that would be hard to reverse without a recession.