Jobs in the private sector, along with ongoing reductions in federal government staffing, led to lower payroll employment in February. But the unemployment rate remains low because of the southern border shutdown. That is why the wage growth remains healthy with a 3.8% rise.
The big question going forward is whether a recent rise in oil prices could push the economy into stagflation. The ugly combination of low economic growth and elevated inflation will also mean higher mortgage rates.
If a major ramp-up in U.S. oil production and the export of liquefied natural gas takes place amid geopolitical uncertainty, then inflation need not rise, and mortgage rates can reach multiyear lows.
