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US payrolls far exceed forecasts

Strength of the US jobs market raises new questions over the pace of likely rate cuts.

05 April 2024

US non-farm payrolls smashed through all expectations in March with 303,000 new jobs added – compared to forecasts of 217,000. The unemployment rate fell marginally by 0.1% to 3.8% while, in an encouraging sign for the Federal Reserve (Fed), average hourly earnings remained at 0.3% growth over the month, much in line with forecasts.

This is a strong jobs report and will cause consternation to the Fed/market narrative about how quickly they should be cutting rates. The markets have eased expectations only modestly as to how many cuts are coming but, on this showing, the Fed will be in no hurry to please them. Treasury bond yields across the curve are moving higher and at the current rate of 5% on short-dated one-year US government debt, this looks great risk-free value.

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Charles Hepworth

Investment Director
My Insights

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