Does the US jobs shortfall vindicate the Fed’s cautious approach

Monday 10th May 2021US non-farm payrolls markedly undershot market expectations on Friday, with just 266 thousand new payrolls, versus the expectation of close to one million. NAB’s Tapas Strickland says some argue that the $300 a week jobless supplement is delaying the return to work. Nonetheless, investors took it as a sign that government stimulus would continue and that the Fed’s program would continue on schedule, with no moves until a string of months with strong recovery in jobs numbers. In Australia all eyes will be on the revised government deficit in the Federal Budget tomorrow. Can the RBA continue with the current scale of bond buying if the government is issuing less of them?

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