Tag Archives: wages

Fast Food no longer worth it: 62% said they are eating it less frequently due to the cost

Fast-Food-prices

Important Takeaways:

  • Many Americans consider fast food to be a ‘luxury’ good since prices have skyrocketed
  • Fast food is beloved in America because it is cheap and convenient.
  • At least it used to be.
  • The recent inflation report for April showed that since President Biden took office, the cost of eating out at restaurants is up nearly 22%. However, fast food has been hit particularly hard, with prices dramatically rising at the most popular restaurant chains beginning even before the COVID-19 pandemic.
  • Gone, too, are the days of the $5 Footlong at Subway. A BLT Footlong that cost $5.50 in 2019 now costs customers $8.49 in 2024, though prices can vary by location. Additionally, Chipotle’s beloved chicken burrito that cost $6.50 in 2019 now runs customers $10.70.
  • Fast-food executives have pointed to rising wages and increased costs for ingredients as factors driving up the prices on their menus.
  • Data from the Federal Reserve Bank of St. Louis shows that fast-food prices have actually increased faster than the average hourly earnings of most employees at fast-food restaurants. Fast-food prices have also outpaced inflation, rising 41% from 2017, while the consumer price index has increased by 35.9%.
  • A recent survey conducted by LendingTree found 78% of consumers now consider fast food to be a “luxury” purchase due to how expensive the meals have become.
  • The financial strain means fewer people are visiting the drive-thru. The findings show three out of four Americans typically eat fast-food once a week, but 62% of respondents said they are eating it less frequently due to the cost.

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Martin Luther King’s wife Coretta knew the cost of Illegal Immigration: Read her opinion here

Coretta King at Podium Addressing Rally

Important Takeaways:

  • MLK’s Wife Coretta Scott King: Illegal Immigration Drives Down Wages, Living Standards for America’s Working Class
  • Coretta Scott King, the wife of Martin Luther King, Jr., once helped successfully quash legislation from Republicans and Democrats in the early 1990s that would have eliminated fines for United States employers hiring illegal aliens over Americans.
  • In 1991, former Sen. Orrin Hatch (R-UT) led an effort in Congress to pass legislation that would have thrown out the ability of the federal government to fine American employers for hiring illegal aliens — the leading magnet for illegal immigration to the nation for decades.
  • Former Sens. John McCain (R-AZ), Ted Kennedy (D-MA), Arlen Specter (R-PA), and Jeff Bingaman (D-NM) were co-sponsors of Hatch’s legislation, while in the House Rep. Nancy Pelosi (D-CA) and then-Reps. Barbara Boxer (D-CA) and John Lewis (D-GA) were among the co-sponsors of an identical bill from former Rep. Edward Roybal (D-CA).
  • When Scott King got wind of Hatch’s legislation, she authored a letter with other Civil Rights leaders detailing how illegal immigration diminishes wages, living standards, quality of life, and employment opportunities for America’s working class and, specifically, black Americans who are most likely to compete against illegal aliens for jobs.
    • Finally, we are concerned that some who support the repeal of employer sanctions are using “discrimination” as a guise for their desire to abuse undocumented workers and to introduce cheap labor into the U.S. workforce. America does not have a labor shortage. With roughly seven million people unemployed, and double that number discouraged from seeking work, the removal of employer sanctions threatens to add U.S. workers to the rolls of the unemployed. [Emphasis added]
    • Additionally, it would add to the competition for scarce jobs and drive down wages. Moreover, the repeal of employer sanctions will inevitably add to our social problems and place an unfair burden on the poor in the cities in which most new immigrants cluster — cities which are already suffering housing shortages and insufficient human needs services. [Emphasis added]

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75,000 Health Care workers go on strike

Kaiser-Strike

Important Takeaways:

  • Thousands of US health care workers go on strike in multiple states over wages and staff shortages
  • Picketing began Wednesday morning at Kaiser Permanente hospitals as some 75,000 health care workers go on strike in Virginia, California and three other states over wages and staffing shortages, marking the latest major labor unrest in the United States.
  • Kaiser Permanente is one of the country’s larger insurers and health care system operators, with 39 hospitals nationwide. The non-profit company, based in Oakland, California, provides health coverage for nearly 13 million people, sending customers to clinics and hospitals it runs or contracts with to provide care.
  • The Coalition of Kaiser Permanente Unions, representing about 85,000 of the health system’s employees nationally, approved a strike for three days in California, Colorado, Oregon and Washington, and for one day in Virginia and Washington, D.C.
  • The strikers include licensed vocational nurses, home health aides and ultrasound sonographers, as well as technicians in radiology, X-ray, surgical, pharmacy and emergency departments.

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Pandemic, supply chain profits hit by rising costs

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • McDonald’s profit hit by rising costs, pandemic curbs
  • Operating costs rose 14% to $3.61 billion as supply chain bottlenecks led the world’s largest burger chain to spend more for ingredients such as chicken and beef, as well as packaging material, while it also raised wages in the United States.

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U.S. consumer spending rises, but inflation eroding households purchasing power

By Lucia Mutikani

WASHINGTON(Reuters) – U.S. consumer spending surged in August, but outlays adjusted for inflation were weaker than initially thought in the prior month, reinforcing expectations that economic growth slowed in the third quarter as COVID-19 infections flared up.

The report from the Commerce Department on Friday, which showed inflation remaining hot in August, raised the risk of consumer spending stalling in the third quarter, even if consumption accelerates further in September. Inflation-adjusted, or the so-called real consumer spending is what goes into the calculation of gross domestic product.

“Third quarter consumer spending is on track for only a scant gain,” said Tim Quinlan, a senior economist at Wells Fargo in Charlotte, North Carolina. “If COVID cases keep falling and sentiment turns positive, there is scope for a more solid finish to this tumultuous year.”

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rebounded 0.8% in August. Data for July was revised down to show spending dipping 0.1% instead of gaining 0.3% as previously reported.

Consumption was boosted by a 1.2% rise in purchases of goods, reflecting increases in spending on food and household supplies as well as recreational items, which offset a drop in motor vehicle outlays. A global shortage of semiconductors is undercutting the production of automobiles, hurting sales.

Goods spending fell 2.1% in July. Spending on services rose 0.6% in August, supported by housing, utilities and health care. Services, which account for the bulk of consumer spending, increased 1.1% in July. Spending is shifting back to services from goods, but the resurgence in coronavirus cases over summer, driven by the Delta variant, crimped demand for air travel and hotel accommodation as well as sales at restaurants and bars.

Economists polled by Reuters had forecast consumer spending increasing 0.6% in August.

Inflation maintained its upward trend in August, though price pressures have probably peaked. The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, climbed 0.3% after increasing by the same margin in July. In the 12 months through August, the so-called core PCE price index increased 3.6%, matching July’s gain.

The core PCE price index is the Federal Reserve’s preferred inflation measure for its flexible 2% target. The Fed last week upgraded its core PCE inflation projection for this year to 3.7% from 3.0% back in June. The central bank signaled interest rate hikes may follow more quickly than expected.

Fed Chair Jerome Powell, who has maintained that high inflation is transitory, told lawmakers on Thursday that he anticipated some relief in the months ahead.

Still, inflation could remain high for a while. A survey from the Institute for Supply Management on Friday showed manufacturers experienced longer delays getting raw materials delivered to factories and paid higher prices for inputs in September.

Stocks on Wall Street were mostly higher. The dollar fell against a basket of currencies. U.S. Treasury prices were mixed.

SLOWING GROWTH

High inflation is cutting into spending. Real consumer spending rose 0.4% in August. That followed a downwardly revised 0.5% drop in July, which was previously reported as a 0.1% dip. With the August and July data in hand, economists predicted that growth in consumer spending would probably brake to around a 1% annualized rate in the third quarter.

Consumer spending grew at a robust 12.0% annualized rate in the April-June quarter, accounting for much of the economy’s 6.7% growth pace. The level of GDP is now above its peak in the fourth quarter of 2019. In the wake of the consumer spending data, JPMorgan economists lowered their third-quarter GDP estimate to a 4.0% rate from a 5.0% pace.

Overall, the economy remains supported by record corporate profits. Households accumulated at least $2.5 trillion in excess savings during the pandemic. Coronavirus infections are trending down, which is already leading to a rise in demand for travel and other high-contact services. Businesses need to replenish depleted inventories, which will keep factories humming.

A third report on Friday from the University of Michigan showed consumer sentiment ticked higher for the first time in three months in September. But a survey from the Conference Board this week showed consumer confidence dropping to a seven-month low in September.

Though personal income gained only 0.2% in August after rising 1.1% in July as an increase in Child Tax Credit payments from the government was offset by decreases in unemployment insurance checks related to the pandemic, wages are rising as companies compete for scarce workers. Wages rose 0.5% in August, which should help to keep spending supported.

But inflation is eroding consumers’ purchasing power, with income at the disposal of households edging up 0.1% after increasing 1.1% in July. The saving rate fell to a still-high 9.4% from 10.1% in July.

“Households still have plenty left in the tank given rising employment and wages, soaring net worth and massive excess savings,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “However, rising prices are eating into spending power, compounding the ongoing lack of supply.”

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

Transitory or here-to-stay? Investors try to read the inflation clues

By David Randall

NEW YORK (Reuters) – From lumber prices to wages and inventories: Reading the clues around inflation has turned into an investor obsession.

The combination of supply bottlenecks from the reopening of the global economy and the resumption of economic growth sent consumer prices in May up by the largest annual jump in nearly 13 years. Employers are raising wages as they compete for scarce workers while retailers have limited inventories because of shipping and production delays.

As investors assess the risks of rising prices to financial markets, however, some think the biggest gains in inflation are already in the rear-view mirror. That is in line with the Federal Reserve’s notion that inflation will be “transitory.”

The Fed meets on Tuesday and Wednesday, and investors will parse every word of its post-meeting statement.

The Fed has been buying $80 billion in Treasuries and $40 billion in mortgage-backed securities monthly, putting downward pressure on longer-term borrowing costs to encourage investment and hiring. Discussions about tapering those purchases are likely at this week’s policy meeting.

“As long as the increase in inflation is modest, stocks could continue to move higher,” said Russ Koesterich, portfolio manager of the $27.6 billion BlackRock Global Allocation Fund.

Koesterich thinks inflation will likely run above trend lines well into 2022 given the bottlenecks in global supply chains. Yet disinflationary forces such as an aging global population and gains in efficiency due to technology will keep a lid on “any 1970’s-style inflation scare,” he said.

Investors who bet on inflation typically move into groups better-positioned to weather price rises, like materials and energy and companies with pricing power. Value stocks, in contrast, benefit from a broad economic recovery that does not become weighed down by steeply rising prices.

Koesterich said his fund has been decreasing its positions in growth stocks like technology and adding to industrials and European banks.

Jeff Mayberry, portfolio manager of the DoubleLine Strategic Commodity fund, thinks May’s inflation numbers will be the highest for the remainder of the year and remains bullish on oil, which hit a multi-year high on Friday. He sees the commodity benefiting from economic growth.

“The market was looking for a reason for inflation to be transitory and they got it,” Mayberry said of May’s inflation number, noting that some of the larger contributors came from short-term factors such as a spike in the price of rental cars.

Ernesto Ramos, chief investment officer at BMO Global Asset Management, also sees price rises as transitory. He cites a drop in lumber prices from May’s high that suggests supply chain bottlenecks will subside and “give us another reason to believe that inflation will remain under control.” Lumber prices are down more than 40% from record highs hit in early May.

REASONS TO WORRY

While the majority of investors believe inflation is transitory, according to a Bank of America fund manager survey, worries remain.

“Inflation has been the most discussed topic with clients for weeks, bordering on obsession,” wrote analysts at Morgan Stanley led by Michael Wilson. Those analysts think the rate of change on inflation is peaking.

Greg Wilensky, head of U.S. Fixed Income at Janus Henderson, said he has been buying more Treasury-Inflation Protected Securities as the break-even rate – a measure of expected inflation in the bond market – has retreated to near its February levels.

While he is not “changing my base case” that high inflation will prove to be transitory, “the risks around the base case continue to skew toward the upside on inflation,” given the persistent difficulties companies are having hiring lower-paid workers, Wilensky said.

The Fed’s statement could give important clues.

“I’m going to watch the Fed on Wednesday and if they treat these numbers with nonchalance it is a green light to bet heavily on the inflation trade,” Paul Tudor Jones of Tudor Investment Corp told CNBC on Monday. He said he would be “really concerned arguing that inflation is transitory” with inventories at a “record low” while demand is “screaming.”

Morgan Stanley Chief Executive James Gorman told CNBC on Monday that “my gut tells me that this economy is recovering faster, inflation is moving quicker and inflation may not be as transitory as we all expect.” He cited the global economic recovery and record levels of fiscal and monetary support.

“Even if investors disagree with the Fed’s often-stated mantra that inflation is just transitory, they have learned to respect the massive influence the world’s most powerful central bank has when possessing such conviction that is not even ‘thinking about thinking’ about easing its foot off the stimulus accelerator,” said Mohamed El-Erian, chief economic adviser at Allianz. “The resulting comfort with continued ultra-loose financial conditions is supportive in the short run of elevated stock prices and low yields.”

(Reporting by David Randall; Editing by Megan Davies and Dan Grebler)

U.S. weekly jobless claims point to strong labor market

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing applications for jobless benefits fell more than expected last week, pointing to sustained labor market strength that could further ease concerns about the economy’s health.

The report from the Labor Department on Thursday followed data last week showing employers hired the most workers in 10 months in December and increased wages for their workers.

Surveys showing steep declines in consumer and manufacturing activity in December had stoked fears that the economy was rapidly losing momentum.

“There are increasing risks and caution over the economic outlook in 2019, but jobless claims say the seas are calm and it looks to be smooth sailing for the economy for now,” said Chris Rupkey, chief economist at MUFG in New York.

Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 216,000 for the week ended Jan. 5. Data for the prior week was revised up to show 2,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims declining to 225,000 in the latest week. The Labor Department said only claims for Puerto Rico were estimated last week.

U.S. financial markets were little moved by the claims report.

Claims were boosted in the week ending Dec. 29 as workers furloughed because of a partial shutdown of the U.S. government applied for benefits. The federal government partially closed on Dec. 22 as President Donald Trump demanded that the U.S. Congress give him $5.7 billion this year to help build a wall on the U.S. border with Mexico.

The shutdown, which has affected a quarter of the government, including the Commerce Department, has left 800,000 employees furloughed or working without pay. Private contractors working for many government agencies are also without pay.

FEDERAL WORKER CLAIMS RISE

Claims by federal workers are reported separately and with a one-week lag. The number of federal employees filing for jobless benefits increased by 3,831 to 4,760 in the week ending Dec. 29. Furloughed federal government workers can submit claims for unemployment benefits, but payment would depend on whether Congress decides to pay their salaries retroactively.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,500 to 221,750 last week.

The economy created 312,000 jobs in December. The unemployment rate rose two-tenths of a percentage point to 3.9 percent as some unemployed Americans piled into the labor market, confident of their job prospects.

While labor market strength has helped to calm fears that the economy, tighter financial market conditions and slowing global growth could make the Federal Reserve cautious about raising interest rates this year.

Minutes of the U.S. central bank’s Dec. 18-19 policy meeting published on Wednesday showed “many” officials were of the view that the Fed “could afford to be patient about further policy firming.”

The Fed has forecast two rate hikes this year. Fed Chairman Jerome Powell and several policymakers have said they would be patient and flexible in policy decisions this year.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid fell 28,000 to 1.72 million for the week ended Dec. 29. The four-week moving average of the so-called continuing claims increased 15,250 to 1.72 million.

November’s wholesale inventories report from the Commerce Department’s Census Bureau, which was scheduled for release on Thursday, will not be published because of the government shutdown.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

A decade of U.S. economic sluggishness may have just snapped back to normal

FILE PHOTO: A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration/File Photo

By Howard Schneider

WASHINGTON (Reuters) – For a solid decade after the collapse of Lehman Brothers touched off a global financial crisis, there was good reason to think the U.S. economy remained broken, from skepticism about the health of the labor market to tepid economic growth and the moribund rate of interest paid on U.S. Treasury bonds.

In a heartbeat, that seemed to change this week, adding facts on the ground to Federal Reserve Chairman Jerome Powell’s glowing portrait of a historically rosy and extended period of super-low unemployment, modest inflation, and steady growth.

It came through Amazon.com Inc’s move to a $15 minimum wage, possibly setting the bar for companies nationwide. It came through a jump in long-term bond yields that signaled faith the gears of growth will remain engaged for a record-long recovery.

On Friday, it came through the 3.7 percent unemployment rate, a 49-year low, continuing a run of employment growth that many analysts, including at the Fed, have long expected to slow.

“Wage inflation is creeping higher,” said Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan.

“There’s no question the job market in the United States is possibly at its best in a generation. There’s no question or debate about that. The jobs report has become an inflation report.”

Treasury bond yields rose further on the payrolls report, with the benchmark 10-year note yield touching its highest level since 2011, and U.S. stocks slipped.

The week’s events were not just consistent with the good times scenario both Powell and U.S. President Donald Trump have laid out. They validated it, and in doing so pointed to a U.S. economy that may be starting to work more like it used to.

As an exercise in old-fashioned supply and demand, Amazon’s decision to raise starting wages across the board was perhaps the best example. Fed and other officials have been anticipating for a while, in fact, that the lack of available workers would prompt companies to raise wages.

“When productivity growth is faster, that is your opportunity to share some of your extra output with your workers. That’s what gets wages higher,” said Vincent Reinhart, Chief Economist at investment manager Standish, and former head of the Fed’s monetary affairs division.

Even former skeptics have become open to the idea that a recent rise in productivity may turn into a trend, drawing comparisons with the “Great Moderation” period of growth during the 1990s, which also featured low unemployment and solid wage growth

The rise in long-term bond rates also may herald a return to more normal conditions, giving cautious investors a reasonable return after years of lackluster outcomes, and easing concerns about a flat or “inverted” yield curve that would herald loss of faith in the future.

There is reason to think it may continue.

To pay for the Republican tax cuts and the bump in defense spending, the Treasury is flooding the market with bonds at a near-record pace, with gross issuance of bills, notes and bonds in August topping $1 trillion in a month for only the second time ever, according to federal SIFMA data.

To sell all those bonds, the Treasury may have to pay higher rates. Meanwhile, a major customer, the Fed, whose purchases of $3.5 trillion of assets during and after the crisis helped foster the recovery, has started shrinking its bond portfolio by $50 billion a month.

There are risks surrounding the week’s development, and a few anomalies.

The Fed, for example, is convinced that with its gradual continuing rate increases, inflation will remain controlled – even as unemployment dives for years to come below levels not seen since the 1960s. If inflation does kick in, as it might be expected to do with such a hot labor market and with Trump’s tariffs pushing up the cost of some imports, it would force the Fed to speed up rate hikes and possibly end the party.

Surging bond rates could also throw cold water on Powell’s positive thinking, and call the Fed’s whole strategy of gradual rate increases into question. High Treasury rates mean higher rates for mortgage lending, auto loans, and a host of other forms of credit that could slow the real economy more than the Fed would like.

“The tariffs, quotas, and trade threats are like shooting the starter’s pistol to say: let’s think about renegotiating” wages and salaries, said Reinhart. “It is possible that the limited influence of resource slack on wages and prices was because we were just stuck, (but) that could change.”

A “divergent” U.S. economy, as Cleveland Fed President Loretta Mester warned, could also mean a stronger dollar – and fewer exports and growth.

But as she noted, for a decade now the concern has been about persistent weakness – that the economy was stuck in a state of what prominent economists deemed “secular stagnation.”

The return of volatility, of reasonable returns for savers, of wage pressure benefiting workers, may all pose risks.

But they are the risks of a more normal world.

“The economy is performing extraordinarily well, at least relative to recent history,” said Joseph LaVorgna, chief Americas economics at Natixis. “It’s not the boom of the late ’90s, but it’s doing pretty well.”

(Reporting by Howard Schneider; additional reporting by Jonathan Spicer and Herbert Lash in New York; Editing by Dan Burns and Nick Zieminski)

U.S. job growth picks up; unemployment rate drops to 3.9 percent

A help wanted sign is posted at a taco stand in Solana Beach, California, U.S., July 17, 2017. REUTERS/Mike Blake

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth increased less than expected in April and the unemployment rate dropped to near a 17-1/2-year low of 3.9 percent as some out-of-work Americans left the labor force.

The Labor Department’s closely watched employment report on Friday also showed wages barely rose last month, which may ease concerns that inflation pressures are rapidly building up, likely keeping the Federal Reserve on a gradual path of monetary policy tightening.

“Fed officials can rest easy that there is not any wage-based inflation on the horizon,” said Chris Rupkey, chief economist at MUFG in New York. “There is no need to speed up the path of interest rates because inflation isn’t heating up in a worrisome manner.”

Nonfarm payrolls increased by 164,000 jobs last month, the Labor Department reported. Data for March was revised up to show the economy adding 135,000 jobs instead of the previously reported 103,000. That was the fewest amount of jobs created in six months and followed an outsized gain of 324,000 in February.

While cold weather in March and April probably held back job growth, hiring is moderating as the labor market hits full employment. Employers, especially in the construction and manufacturing sectors, are increasingly reporting difficulties finding qualified workers.

The drop of two-tenths of a percentage point in the unemployment rate from 4.1 percent in March pushed it to a level last seen in December 2000 and within striking distance of the Fed’s forecast of 3.8 percent by the end of this year. It was the first time in six months that the jobless rate dropped.

But 236,000 people left the labor force in April, adding to the 158,000 who quit in March. The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell to 62.8 percent last month from 62.9 percent in March. It was the second straight monthly drop in the participation rate.

Economists polled by Reuters had forecast payrolls to rise by 192,000 jobs in April and the unemployment rate to fall to 4.0 percent. Average hourly earnings rose 0.1 percent last month after a 0.2 percent gain in March. That left the annual increase in average hourly earnings at 2.6 percent.

The dollar shrugged off the employment data, rising to its highest level this year against a basket of currencies. Prices of U.S. Treasuries fell and U.S. stocks rose.

Sluggish wage growth and a slowdown in hiring threaten to undercut the Trump administration’s argument that its $1.5 trillion income tax cut package, which came into effect in January and is highlighted by a sharp drop in the corporate income tax rate, would boost wages and hiring.

Companies like Apple have used their tax windfall for share buybacks and dividends.

President Donald Trump cheered the drop in the unemployment rate on Friday.

“I thought the jobs report was very good. The big thing to me was cracking 4,” Trump told reporters. “That hasn’t been done in a long time … we’re at full employment. We’re doing great.”

Democrats, however, reiterated their criticism of the tax cuts, saying more than $390 billion in share buybacks had been announced since the passage of the tax bill.

“President Trump promised American families that they would see a $4,000 annual raise after the tax plan, so far, average weekly wages have increased $11.69,” Democratic Senator Martin Heinrich said.

‘SUSTAINABLE PACE’

But average hourly earnings could be understating wage inflation. The Employment Cost Index, widely viewed by policymakers and economists as one of the better measures of labor market slack, showed wages rising at their fastest pace in 11 years during the period.

Inflation is flirting with the Fed’s 2 percent target.

The Fed’s preferred inflation measure, the personal consumption expenditures price index excluding food and energy, was up 1.9 percent year-on-year in March after a 1.6 percent rise in February.

The U.S. central bank on Wednesday left interest rates unchanged and said it expected annual inflation to run close to its “symmetric” 2 percent target over the medium term.

Economists interpreted symmetric to mean policymakers would not be too concerned with inflation overshooting the target. The Fed hiked rates in March and has forecast at least two more increases for this year.

Economists expect the unemployment rate will drop to 3.5 percent by the end of the year. Monthly job gains have averaged about 200,000 this year, more than the roughly 120,000 needed to keep up with growth in the working-age population. Though the decline in the labor force accounted for the drop in the unemployment rate last month, labor market slack is diminishing.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to 7.8 percent last month, the lowest level since July 2001, from 8.0 percent in March.

Construction payrolls rebounded by 17,000 jobs last month after recording their first drop in eight months in March. Manufacturing employment increased by 24,000 jobs in April after a gain of 22,000 positions in March.

Payrolls for temporary help, seen as a harbinger of future permanent hiring, rose by 10,300 after falling by 2,100 in March. There was a modest gain in leisure and hospitality employment while wholesale traders laid off workers.

Government payrolls fell 4,000 in April amid a decline in education employment at state governments.

“The moderation in job gains over the past two months may mark the beginning of the slow deceleration to a sustainable pace of job gains, which we estimate to be around or a little below 100,000 per month,” said Michael Feroli, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Additional reporting by Roberta Rampton; Editing by Paul Simao)

‘We’re not leaving!’ Oklahoma teachers in second day of protests

FILE PHOTO - Teachers pack the state Capitol rotunda to capacity, on the second day of a teacher walkout, to demand higher pay and more funding for education, in Oklahoma City, Oklahoma, U.S., April 3, 2018. REUTERS/Nick Oxford

By Lenzy Krehbiel-Burton and Nick Oxford

TULSA, Okla./OKLAHOMA CITY (Reuters) – Oklahoma teachers walked out of classes for a second straight day on Tuesday, closing schools in the state’s two biggest cities, as they demanded higher state spending on public education in the latest U.S. labor action by educators.

Hundreds of teachers crowded into the state capital, Oklahoma City, chanting “fund our schools” and “we’re not leaving” as they lobbied lawmakers to pass a tax package that would raise another $200 million for the state school budget. Teachers, parents and students staged sympathy rallies around the state.

The protests reflected rising discontent after years of sluggish or declining public school spending in Oklahoma, which ranked 47th among the 50 U.S. states in per-student expenditure, and 48th in average teacher salaries in 2016, according to the National Education Association.

Teachers arrive at the the state Capitol for the second day of a teacher walkout to demand higher pay and more funding for education in Oklahoma City, Oklahoma, U.S., April 3, 2018. REUTERS/Nick Oxford

Teachers arrive at the the state Capitol for the second day of a teacher walkout to demand higher pay and more funding for education in Oklahoma City, Oklahoma, U.S., April 3, 2018. REUTERS/Nick Oxford

The Oklahoman newspaper listed about 70 schools or districts that were shuttered on Tuesday. The walkouts follow a two-week job action in West Virginia that led lawmakers last month to vote to raise teachers’ pay. Educators in Kentucky also staged walkouts against years of stagnant or reduced budgets by a Republican-controlled legislature and most returned to their classrooms or scheduled spring break holidays on Tuesday.

Teachers in Arizona have threatened similar job actions.

Frederick Smitherman, 48, who teaches eighth grade at Will Rogers Early Junior High School in Tulsa, joined teachers, parents and students in a satellite protest on Tuesday.

“We all pay taxes and expect our legislators to do what we voted them in to do,” Smitherman said. “What else are teachers supposed to do besides yell and scream? We can vote them out but voting one out just brings a bad one in instead. My hope is that this doesn’t fall on deaf ears.”

Monday’s walkout by up to 30,000 educators in Oklahoma forced the cancellation of classes for some 500,000 of the state’s 700,000 public school students, according to teachers’ union officials, who estimated that a similar number of teachers took part in Tuesday’s action.

Oklahoma’s first major tax hike in a quarter century was approved by legislators last week and signed into law by Governor Mary Fallin – a $450 million revenue package intended to raise teachers’ salaries by about $6,100 a year and avert a strike.

Teachers said that package fell short and demanded lawmakers reverse spending cuts that have forced some districts to impose four-day school weeks. The $200 million package they were lobbying for on Tuesday would increase hotel and capital gains taxes.

“Lawmakers have left significant funding on the table – funding that has bipartisan support but is being held up for political reasons,” the Oklahoma Education Association, the state’s largest teachers union, said in a statement.

Oklahoma secondary school teachers had an annual mean wage of $42,460 as of May 2016, according to the U.S. Bureau of Labor Statistics. The minimum salary for a first-year teacher was $31,600, state data showed.

The Oklahoma strikes on Monday coincided with a second day of walkouts by several thousand teachers in Kentucky after legislators there passed a bill imposing new limits on the state’s underfunded public employee pension system.

Poppy Kelly, 47, a French teacher at Thomas Edison Preparatory High School in Tulsa with 23 years of teaching experience, said boosts in spending were needed for school facilities, books and supplies as well as teacher salaries.

“Oklahoma kids for a decade are so used to not having enough or having to make do that they don’t know what ‘enough’ looks like,” Kelly said. “They want textbooks. They want chairs. They want tables that don’t have a bent leg. They want proper technology in the classrooms.”

(Additional reporting by Jon Herskovitz in Austin, Texas and Jonathan Allen in New York; writing by Scott Malone; editing by Bernadette Baum and Bill Trott)