The US economy continued to generate jobs at a good pace in Marchwith which the unemployment rate dropped to 3.5%sign of the persistent rigidity of the labor marketthat could prompt the Fed to raise interest rates again next month.
Non-farm payrolls increased by 236,000 jobs last month, informed this Friday the Labor Department of the US in its report on employment. These data come after a slowdown in hiring that was seen in January and February.
Economists polled by Reuters they had forecast an increase of 239,000 jobs. Estimates ranged from 150,000 to 342,000. The economy needs to create about 100,000 jobs a month to keep up with the growth of the active population.
As with most recent economic data, it is too early for the financial market stresstriggered by the bankruptcy of two regional banks in Marchis reflected in the employment report.
The unemployment rate fell to 3.5% from the 3.6% in February. The iaverage hourly earnings increased 0.3% in March, after rising 0.2% in February. This reduced the annual increase in wages to 4.2% from 4.6% in February, figure still too high to meet the 2% inflation target set by the Federal Reserve.
How can this impact the Federal Reserve?
The officials of the Federal Reserve will now wait for the inflation data for the end of the month for gauge the impact of your toughening campaign of monetary policy, which has been going on for a year now.
According to CME Group’s FedWatch tool, financial markets are leaning towards the US central bank raising rates another 25 basis points at the monetary policy meeting on May 2-3.
Last month, the Federal Reserve raised its benchmark overnight interest rate by a quarter of a percentage pointbut indicated it was about to pause rate hikes in a nod to financial market stress. Since last March, the Federal Reserve has raised its interest rates by 475 basis pointsfrom a level close to zero to the current range of between 4.75% and 5.00%.
Source: Ambito
