Fed official warns subdued job growth could become the new normal as geopolitical risks rise

April 4 (UTC+8) — Nick Timiraos, often dubbed the Federal Reserve's "voice," reported that U.S. employers added 178,000 jobs in March, rebounding from February's steep drop. The unemployment rate edged down to 4.3%. Beneath the headline gains, the report showed softer momentum. Wage growth for typical workers slowed to its weakest year-over-year pace since the post-pandemic recovery began five years ago. Looking past month-to-month volatility, the two-month average points to a clearer trend: payrolls are expanding by only about 22,500 jobs per month. That pace would have been alarming two years ago; now it may still fall within what policymakers view as acceptable. Fed officials are still working to explain the shift. San Francisco Fed President Mary Daly wrote Friday: "It is not easy to convince the public that an economy with zero job growth can still be consistent with full employment." The backdrop is increasingly fragile as new supply shocks loom. If the Iran conflict drags on and higher fuel costs or commodity shortages pressure businesses and consumers, the labor market may have little buffer to absorb the hit. Persistent inflation worries could also weaken confidence in rate cuts, further narrowing the Fed's room to maneuver. Source: ChainCatcher; ME News