The US labor report for April 2023 released 8:30am ET showed US economy added 253,000 jobs and employment rate is at 3.4%. The number of unemployed population is 5.7 million. The unemployment rate in March 2023 was 3.5%. In February 2020 unemployment rate was 3.5% right before the pandemic. This is a sign that things are back to pre pandemic levels.
Earlier in the week the Federal Reserve FOMC released its interest rate statement announcing that it would increase the target rate to range of 5% to 5.25%. They reported inflation remain elevated and may need to act again in the next meeting.
In May 1st, JPMorgan Chase announced that they had purchased First Republic. First Republic is the second regional bank to close after SVB. First Republic had a concentration of high value depositors who after seeing First Republic stock price keep falling decided to withdraw their deposits. In the Q1 2023 report, First Republic reported their deposits was $104.5 billion, a decline of -35.5% after receiving aid from major banks who deposited $30 billion. Without that aid, their deposits declined -40.8%. With these recent bank failures, banks are expected to tighten their lending standards to limit their underwriting of loans. This will lower economic activity. Home and car loans will be harder to get and people will be buy less of these high ticket items.
https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm#
https://news.firstrepublic.com/static-files/013f57fb-b980-4353-bbb3-0e7a3b27f20a
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230503a.htm