The US labor market rebounded in March, and the pace of job creation surprised – it was much higher than expected. These are data that the Federal Reserve looks at very closely when deciding on interest rates in the United States.
The number of jobs in the non-farm sector in the US increased by 178,000 in March. after taking into account seasonality, which is a reversal of the decline by 133,000. in February, the Bureau of Labor Statistics reported Friday.
The result is about three times better than economists' expectationswho predicted an increase of 59 thousand.
The data for February was revised down by 41,000, and for January – up by 34,000, to 160,000, which gives a three-month average of approximately 68,000.
The unemployment rate dropped slightly to 4.3 percent, although this was mainly due to a sharp decline in the labor force.
According to Pekao economists, data from the American labor market are very good and support the lack of interest rate cuts.
“The Fed has carte blanche to worry about inflation. It seems that even if the Gulf War had not broken out, we would not have seen Fed rate cuts this year,” say Pekao economists.
“Employment growth should be zero, given the decline in immigration and demography. The U.S. job market is much stronger than it seems“- they add.
What do economists overseas say about this? “March's data will keep the Federal Reserve in check, but no one is declaring victory yet. This will likely be a difficult spring for job seekers,” said Heather Long, chief economist at Navy Federal Credit Union.
With inflation well above the Fed's target and energy prices rising amid the ongoing war with Iran, markets expect little change from the central bank this year.
Following the release of the jobs report, stock futures indicated a virtually zero probability of change at the April 28-29 Federal Open Market Committee meeting and a 77.5 percent probability of change. the likelihood that the Fed will keep interest rates on hold through the end of the year, according to CME Group's FedWatch tool.
