🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

US economy added more jobs than expected in March; nonfarm payrolls rose 303,000

Published 04/05/2024, 05:22 PM
Updated 04/06/2024, 02:52 AM
© Reuters

Investing.com - The U.S. economy added more jobs than expected last month, signaling that the labor market remains relatively robust, which could provide the Federal Reserve with more headroom to delay the cutting of  interest rate until later this year.

Nonfarm payrolls rose by 303,000 in March, above the revised lower 270,000 seen in February, according to data from the Labor Department's Bureau of Labor Statistics. Economists had called for a reading of 212,000.

Average hourly earnings grew by 0.3% month-on-month, as expected, rising from a revised 0.2% in January. The unemployment rate, meanwhile, fell to 3.8% from 3.9% the prior month, remaining below 4% for 26 straight months, the longest such stretch since the late 1960s.

In March, job gains centered mainly around health care, government and construction, while employment in leisure and hospitality returned to its pre-pandemic February 2020 level.

Employment was little changed in retail trade, with gains in general merchandise retailers largely offset by job losses in building material and garden equipment and supplies dealers and in automotive parts and tire retailers.

The strong jobs report cooled bets on a soon rather than later rate cut, with just 51% of traders expecting a June cut, down from 60% a day earlier.

While the data weaken conviction that the labor market is likely to take a big hit from higher for longer interest rates, some on Wall Street aren't ready to throw in the towel on June a rate cut. 

"We still see enough weakness in the household survey and elsewhere to leave our base case for a more significant uptick in unemployment later this year," Citi said in a note as it continued to back a June rate cut. 

"Fed officials viewing stronger jobs data as good news on the supply side, the Fed remains on track to begin cuts in June," Citi added.

Still, even if the labor market doesn't take a significant hit, Citi argues, that Fed Chair Jerome Chair Powell and colleagues have already noted that this a strong jobs market "can be sustained without raising inflationary risk" as more people neter the labor market.

The Fed stuck to its view of three rate cuts this year at its March meeting, raising hopes for a June cut, but a number of officials, including Chair Jerome Powell, have since stressed the need for the U.S. central bank to continue to study more data before a rate-cutting cycle is started.

Citi, however, expects the Fed to deliver 5 rate cuts this year, but said if the job market holds up better-than-expected than the Fed is likely to cut rates three times. 

(Peter Nurse contributed to this article).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.