For anyone concerned that the Federal Reserve might move too quickly to boost interest rates, the disappointing March employment report was reassuring, if not welcome, news. Most analysts agreed that the significant slowdown in hiring (employers added only 126,000 new jobs) will give the Fed reason to regain the “patience” the Federal Open Market Committee omitted for the first time in nearly a year from the report following its most recent policy meeting.
Fed Chairman Janet Yellen seemed to confirm that assessment, noting that the employment report — the first in 12 months to fall below 250,000 ― reflects weakness in the “underlying economy.” Yellen has also emphasized consistently that the decision on when to back away from a policy that has kept a firm cap on rates will be driven by current economic conditions rather than by future inflation fears.