U.S. President Donald Trump reiterated his disdain for rising interest rates on Friday, saying that the economy would take off “like a rocket ship” if the Federal Reserve cuts interest rates. Furthermore, he added that the central bank is impeding economic growth in the U.S. and has “really slowed us down.”
“I think they should drop rates and get rid of quantitative tightening,” Trump told reporters. “You would see a rocket ship. Despite that, we’re doing very well.”
Last month, the Federal Reserve elected to keep rates unchanged, holding its policy rate in a range between 2.25 percent and 2.5 percent. In addition, the central bank alluded to no more rate hikes for the rest of 2019 after initially forecasting two.
With regard to Trump’s comments on quantitative tightening, the Fed has been alluding to more flexibility with its holdings of Treasuries and mortgage-backed securities. The central bank has been on a path towards a reduction in assets, which would come prior to the end of 2019.
Trump’s comments come as job growth in March returned after a weak February as 196,000 jobs were created as opposed to 175,000 expected by economists, which eased recession fears on Friday.
The better-than-expected payrolls brings the three-month average to a strong 180,000 jobs created per month. That number is lower than the 223,000 jobs created in 2018, but falls in line with a robust labor market.
Meanwhile, the unemployment rate held steady at 3.8 percent, but lower-than-expected wage gain came in at just 0.1 percent after February’s better-than-expected 0.4 percent. Nonetheless, all signs still point to a strong labor market overall.
Furthermore, data released by the Labor Department on Thursday revealed that jobless claims in the U.S. hit a 49-year low, suggesting that the labor market is still strong despite fears of a global economic slowdown.
This latest jobs data comes after U.S.-based companies had less layoffs during the month of March, but job cuts during the first quarter were at their highest since 2015–a possible sign of a fading $1.5 trillion tax cut package. Initial claims for state unemployment benefits fell by 10,000 to a seasonally-adjusted 202,000 for the week ended March 30–the lowest level since early December 1969.
Economists polled by Reuters were expecting claims to rise to 216,000. Analysts view these latest numbers as continued signs of a labor market that is still operating at full steam.
Nonetheless, these latest numbers come after employment data released by ADP and Moody’s Analytics showed that job growth hit an 18-month low in the month of March. Private payrolls went up by 129,000 for the month, which fell below the 173,000 that economists surveyed by Dow Jones were expecting to see.
Furthermore, a February employment data revision did show an increase of 197,000 as opposed to the initial number of 183,000. It was the lowest figure since March 2017 when private payrolls increased by 111,000.
For more market trends, visit ETF Trends.