April's jobs report fell squarely in the goldilocks zone. Adding223,000 jobs, hiring rebounded from the previous month's lull andwas strong enough that markets were encouraged in their outlook forthe broader economy. It was not so strong, however, that investorsturned to panic in anticipation of an imminent interest rate hike.Instead, the ten-year Treasury yield shaved a few basis pointswhile stock markets moved sharply higher.

The unemployment rate declined to 5.4 percent, the lowest levelin seven years, while the broader U-6 measure of laborunderutilization also gave up 10 basis points, slipping to 10.8percent. Many of the secondary measures of labor market health werepractically unchanged, consistent with prodding gains in the jobsmarket. An ongoing challenge for policymakers and academics, theparticipation rate recouped 10 basis points but remains near itslowest point in decades. The employment-population ratio wasunchanged at 59.3 percent. Both for the participation rate and theemployment ratio, demographics offer an incomplete explanation.

What next? Keep looking for signs of stronger wage gains.Private sector wages hardly budged in the new report, with averageweekly earnings increasing by just 0.1 percent from March to April.If job growth continues at its current pace and the number ofAmericans engaged in the labor market does not improve appreciably,the unemployment rate should fall to the lower bound of the Fed'sestimate of its long-term range within the next four to fivemonths. At that point, a textbook analysis points to moremeaningful wage growth and a basis for a rate adjustment. Ratherthan rocking the summer boat, bets are the Fed will wait tillSeptember.

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Dr. Sam Chandan

An irreverent take on the macroeconomic environment. Dr Sam Chandan is President and Chief Economist of Chandan Economics and an adjunct professor in real estate and public policy at the Wharton School of the University of Pennsylvania.