Strong jobs report reduces recession risk but wage growth lags inflation (with Romaine Bostick, Katie Greifeld)

Asks for Sperling's take on the jobs report, noting it was much stronger than expected and seemed to be broadening out.

Katie Greifeld

Gene Sperling

The report was much stronger than projected and makes chances of a recession quite low, despite turmoil with Iran and tariffs.

The hard news is how the average worker feels, with relatively slow wage growth (3.4% annualized) in the face of 7.2% annualized CPI inflation over the last three months.

Asks about the bond market pricing in a full rate hike for 2026 and how that factors into affordability concerns.

Katie Greifeld

Gene Sperling

This is a tough situation for the Fed. Real wage growth is the lowest since right after the pandemic. People are feeling the squeeze as wages are not keeping up with prices.

I am not projecting a rate increase and would not be for it. I think it makes sense to hold. The job market is solid, but we've only averaged about 50,000 jobs since January 2025.

Asks about the potential policy response from the White House/Treasury to address the disconnect between strong headline numbers and how people feel about the economy.

Romaine Bostick

Gene Sperling

Traditional indicators like unemployment are important, but if people feel prices are higher and wages aren't keeping up, it affects everybody. The Michigan consumer sentiment was the lowest on record in 70 years.

The White House has options: work harder to resolve things in Iran (management of the Strait of Hormuz) and pull back on tariffs. They have tools to do something.

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