The 223,000 jobs the U.S. added in April suggest the Fed won't hike rates until September, says Wells Fargo economist John Silvia.
Job growth rebounded last month the US economy adding 223000. Jobs the unemployment rate. Taking down a fight point 4% joining us witness box Wells Fargo chief economist John Silvia. Welcome John how would you characterize. This jobs report. While front I would say it's pretty solid of of what it's consistent what we've seen. Over the last three to six months. There was broad based gains in the private sector services area. And the witnesses. Showed up in the air Asia would have expected minding. This particularly weak manufacturing was on a flat. But there were certain games for example in construction. That was very positive so as a good solid report. Which are wait is picked up 2.2 percent yarn years and more Americans went looking for jobs decent some momentum with this report. I'll absolutely UC in the average hourly earnings and I'm like teach them vote. Over the last three or four months you've also seen the employment cost index which takes into a broader measure of labor compensation. Has picked up a lot to two and a half to 3%. Over the last six months so there's a lot of good momentum there in terms of wages so when you have to higher wages. And more people working. Overall consumer income has improved but doesn't economists from what I understand when you know it's inserted. Right there's an again wages a very narrow nowadays a lot of people care about benefits. And a lot of people worked on salaries and I'm not terribly aware of what they're average hourly earnings up but when you look at the broader wages and salary component. Not you're talking about 3% plus growth and that's pretty consistent with consumer spending which of classes on point looking at the strength of the overall economy. John on the downside the average you know workweek that remain unchanged we had labored through participation rate inching higher but still remaining low and and the last two months off their remarks were revised downward does that worry you at all was at this time. I know puts a limit down on the pace of improvement I think what happening is a lot of people like a stronger economy. Pick up in the economy we're just not saying I think what you're looking at now with the economy continues to probably 2015. To go something like two and a half percent. Which is very close to 2014. But less than a lot of people had expected at the beginning of the year. So it seems as if there's some factors tacking wealth but it still is pretty solid two and a half percent Krause all right let's put. Put this all together for us John so what does this mean in terms of the timing for fed officials raising interest rates. I don't think it alters the time at all for an I think the focus still last today. Probably in September. A modest increase but certainly not a series of increases because at this point you don't see such forward momentum to justify. 1234. Increases in or out so one increase in September I'm gonna wait and see with the data indicate. OK John so up and goldilocks scenario than. Yes that is very much a goalie lots scenario for those two. Out looking for jobs on the currently employ getting better wages. And certainly for the overall economy this good solid momentum via. Especially for the American consumer and especially in the construction sector so I think it is a very positive scenario and still modest inflation suggested that the Fed doesn't have to be any more aggressive. That was the market Audi expected for some time. OK we enforce that and thanks again John appreciate. Our thanks still wells Fargo's John Silvia I'm Fred Katayama this is what.