Investors should not worry about the Federal Reserve raising interest rates following the release of the latest US employment report, said CNBC’s Jim Cramer.
The companies hired 916,000 workers last month, according to Department of Labor data released Friday. However, the report also showed that average hourly earnings fell by 4 cents in March.
Wages will be a key component for the Fed to measure inflation, said the host of “Mad Money”.
“Professional financial managers crave growth without wage inflation, and that is exactly what we have … nirvana for stocks,” said Cramer. “This type of labor report gives Fed Chairman Jay Powell the green light to keep interest rates low.”
“I like [Powell’s] deliver more than those of inflationists now, because nothing is more important for stocks and bonds than that non-agricultural Department of Labor report we received on Friday, “said Cramer.
Cramer also pointed to a drop in oil prices as a reason for the Fed to keep rates at historically low levels. West Texas Intermediate futures fell more than 4% on Monday.
These elements will allow Powell to stick to his plan to keep rates low until the economy recovers from last year’s pandemic crisis, according to Cramer.
The comments came after the stock rebounded to open the first full week of the second quarter. The S&P 500 and the Dow Jones Industrial Average jumped more than 1%, each, to new records. The high-tech Nasdaq Composite outperformed the Dow and S&P 500, up 1.7%, and is now about 3% below its February record.