May 2, 2018—As of May 1, the U.S. economy has entered the second-longest economic expansion in its history (tied with the expansion of 1961–1969). Though “expansions don’t die of old age,” this new milestone will likely keep markets on edge watching for signs of a peak in the economic cycle. One of the key indicators frequently monitored for signs of a turn in the economy is accelerating wage growth.
The latest employment report showed softer-than-expected job gains in March while wage growth edged up. This raised concerns about the possibility of the Fed having to hike rates in the face of a softening job market if upward wage pressures persist. In our view, however, there is no cause for alarm on this front. The data shows what we would expect from a maturing labor market, one in which job growth slows and wages rise gradually.
March 13, 2018 – President Trump formally announced on March 8 the introduction of a 25% tariff on U.S. steel imports, and a 10% tariff on aluminum imports, to be enacted in 15 days. This follows the surprise March 1 informal announcement that these tariffs were to be applied to all trading partners with no exemptions, which set off worries about potential trade wars, adding to recent market volatility.