The U.S. unemployment rate probably fell to 3.5% in April, matching the lowest reading since the 1960s, and many economists expect it to keep declining — potentially complicating the Federal Reserve’s fight against inflation.
The reason? Red-hot labor demand doesn’t appear to be cooling any time soon. Job openings and quits are back to fresh highs, and employment costs are growing at a record pace.
Such intense need for workers risks sparking even faster wage growth at a time when the Fed is already trying to tamp down the highest inflation in four decades.
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