The economy of USA added more jobs than expected last monthindicating that the labor market remains relatively robust, which could provide the Federal Reserve with more room to delay the reduction of interest rates until later this year.
Now the question is how Wall Street will react, which yesterday gave way in an atypical movement of the S&P 500 that erased almost 50 points of gains in one day in a few minutes.
Non-farm payrolls They are a monthly statistical data that represents how many people have a job in the US in companies dedicated to manufacturing, construction and supply of goods.
According to data from the Department of Labor’s Bureau of Labor Statistics, Nonfarm payrolls increased by 303,000 in March, up from the downwardly revised figure of 270,000 recorded in February. Economists had forecast a reading of 212,000.
Average hourly earnings rose 0.3% month-over-month, as expected, up from a revised 0.2% in January. Meanwhile, the unemployment rate fell to 3.8% from 3.9% the previous month, staying below 4% for 26 consecutive months, the longest streak since the late 1960s.
In March, Job gains were primarily focused on healthcare, government and construction, while employment in leisure and hospitality returned to its pre-pandemic level in February 2020.
Is the Fed’s rate cut overshadowed?
Employment was little changed in retail trade, with gains at general merchandise retailers, largely offset by job losses at building materials distributors and gardening, as well as at auto parts and tire retailers.
The Fed maintained its vision of three rate cuts this year at its March meetingraising hopes of a cut in June, but several officials, including Chairman Jerome Powell, have since emphasized the need for the US central bank to continue studying more data before starting a rate cut cycle.
Strong economic numbers, including surprise growth in U.S. manufacturing earlier in the week, have tempered expectations that interest rate cuts will begin as soon as June.
Minneapolis Fed President Neel Kashkari added doubt Thursday, saying that if inflation remains stagnant, an interest rate cut may not be necessary at all this year.
Source: Ambito
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