Much better than expected employment data in March this Friday only reinforced the focus on the plans of the Federal Reserve (Fed) and its schedule to begin cutting interest rates.
Once again, exceeding all forecasts, the United States labor market demonstrated its recession-proof strength and the Fed's restrictive policy with the creation of 303,000 jobs last month, when the forecast remained at 200,000. The unemployment rate fell one tenth, to 3.8%, remaining at historically low levels, from five decades ago, and for a long period of time. The index is below 4% since February 2022.
There are already 39 consecutive months in which jobs have been created. This, according to analysts, reinforces confidence among investors that the Federal Reserve will conclude that the US economy has reached that point of healthy equilibrium in which vigorous commercial activity, a powerful labor market and rising salaries. Gone are the days when experts predicted an “imminent” recession.
Until Thursday, the week had been very negative for Wall Street. The stock indices fell sharply and continuously following the words of Jerome Powell, president of the Fed, that he had not yet observed that point of reversing interest rates, at the highest level in 22 years (5.25 -5.5%). He assured that it will be at some point this year, but implying that it will be sooner rather than later. However, the new news raised speculation that the cuts will come at the June meeting.
But more than a few analysts argue that the stock market's wobble was due to concerns that a strong labor market and a resilient economy could cause the central bank to hold back for longer than expected. At first, the markets had a flat response after the employment numbers were known, although everything is very volatile.
The containment imposed by the US central bank since March 2022, when the price of consumer products soared and inflation climbed to the top of 9.1%, has not prevented the machinery from continuing to add jobs every month. well above expectations. Even after this last data, there are those who speak of a job boom.
The 303,000 jobs created not only exceeded expectations, but are above the 270,000 in February, a figure that was already considered well above what was expected. In another very important factor for the Fed, wages increased on average by 0.3% during March and this puts the annual level at 4.1%, almost one point above February inflation.
The demonstration of power was confirmed by the fact that the labor force increased, a sign that citizens went out to look for employment because they considered it was the right time.
The increase in occupations was due to common sectors, such as healthcare (72,000), government positions (71,000), leisure and hospitality (49,000) or construction (39,000). Retail contributed 18,000 and the other services category added 16,000.
