US employment jumped last month as the US economy continued to perform well despite inflation and global gloom
US employment jumped last month as the US economy continued to perform well despite the effects of inflation and global gloom.
Official figures showed 517,000 jobs were created last month, bringing unemployment down to 3.4%, the lowest level since 1969. The number was much higher than expected, with economists predicting a gain of 185 000.
This gave the dollar a boost and sent the pound down to below $1.21 after trading above $1.22 earlier in the day.
A weaker pound benefits many businesses in the Footsie that make money overseas, such as in the US, as the money is worth more when brought back to the UK.
But analysts noted that the boiling job market would likely lead to more interest rate hikes from the Federal Reserve as it tries to bring inflation down to 2%.
Boost: Official figures showed 517,000 jobs were created last month, bringing unemployment down to 3.4%, the lowest level since 1969
“Investors were hoping for further indications of a slowing US labor market that could allow the US Fed to moderate its rate hikes,” said Rob Clarry of financial services firm Evelyn Partners.
“While that still doesn’t necessarily spoil this narrative, it could discourage the interpretation that there will be only one more 0.25% hike before the much-discussed Fed ‘pause’,” he said. he added.
The US central bank raised hopes it could pick up the pace of rate hikes earlier this week with a 0.25 percentage point hike to 4.5%-4.75%. It was lower than December’s half-point rise and a string of three-quarter-point increases last year.
But the jobs figures are likely to spark speculation of steeper increases returning to tame inflation. The data did not appear to boost wages, with hourly wages rising just 0.3% month-over-month despite a 4.4% annual increase in wages, nearly double the historical average.
