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US payrolls topped forecasts in February

But uptick in jobless rate and revisions to December and January numbers raise prospect of a June rate cut.

8 March 2024

Jobs Report Friday in the US saw another strong reading on the face of it. Expectations were for 200k new jobs being added over the month of February, but instead we saw 275k new additions. However, muddying the waters was an uptick in the unemployment rate from 3.7% to 3.9% and slower-than expected wage growth of 0.1%, compared to forecasts of 0.2%.

December and January’s non-farm employment change were revised down by quite some margin though (by 167k) which are quite large by historical standards, further complicating the apparent strength of the labour market. If we are genuinely seeing the unemployment rate having troughed and moving higher, and wage growth slowing, then it obviously pushes the door for rate cuts open wider. Overall, this was a softer-than-expected jobs report and raises the likelihood of the Federal Reserve cutting rates in June.

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Charles Hepworth

Investment Director
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