In this morning’s data, the economy added 303,000 jobs in March, much higher than expected. The Health Care and Social Assistance and Construction industries were relatively strong, while Temporary Help was again relatively weak. The Unemployment Rate ticked one-tenth lower to 3.8%, and the Labor Force Participation Rate ticked two-tenths higher to 62.7%. Average Hourly Earnings increased by 0.3% in March, as expected, and was slightly more than the monthly increase in the previous month. Wages grew 4.1% on an annual basis. In addition, Average Weekly Hours were 34.4, which is one-tenth higher than the previous month.
Overall, another positive headline jobs figure in March coupled with a drop in the unemployment rate. The labor market is maintaining its resilience in the current environment. Average Hourly Earnings on an annual basis remain slightly above historical averages, and core inflation measures are still above the Federal Reserve’s 2% annual target. These data points help to explain why they remain patient, and data dependent on the decision to introduce interest rate decreases. As a result, the results and direction of both the labor market and inflation will be key for markets as Fed policy, the election, and corporate profits unfold in the months ahead.
Following the release of the jobs report, the yield on the U.S. 10-year treasury ticks higher and equity futures are also higher as we head into the market open.
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