The Day at a Glance | May 11 2021

The Top

· *FED officials assure that April`s disappointing employment figures don’t modify the expectations in the labor market`s recovery.

· *Prices for producers in China increased to their highest levels since 2017 in April (6.8% annual); there are no signs of costs being transferred to consumers (CPI 0.9% annual).

· *Gross fixed investment in Mexico increased 2.4% during February (-3.5% annual); private consumption dropped (-) 0.2% (-6.5% annual).

Economic environment

Robert Kaplan, President of the Dallas FED, affirmed that the recent labor market`s figures don’t change his expectations of a solid recovery. In an interview with Bloomberg, the member of the Federal Reserve assured that it`s possible that employers could have found some problems to attract workers despite offering higher wages. For this reason, April`s employment figures were much lower than those estimated by the analysts` consensus. However, Kaplan considered that the trend will continue to show a strong creation of jobs in the next few months, especially in the sectors that will reopen. Mary Daly, of the San Francisco FED, also said that she remains optimistic and that there is still road ahead for a full recovery in the labor market. Charles Evans, of the Chicago FED, said that employment figures will return to high levels – despite April`s disappointing figures. For Evans, the disappointment is still an enigma, but expects at least a couple of the following months to log figures close to one million new jobs per month. Daly and Evans have voting power in the FED`s Open Market Committee; Kaplan doesn`t vote on monetary policy decisions this year. As for the reasons that caused April to record such a low number of new jobs (compared to expectations), unemployment aid was brought up again – as this could be discouraging people from returning to the workforce; similarly, the lack of childcare services and an increase in the retirement rate among workers were also mentioned as probable reasons for last month`s low figure.

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