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US employment rose sharply last month as the US economy continued to perform strongly despite battered inflation and global gloom
US employment rose sharply last month as the US economy continued to perform strongly despite battered inflation and global gloom.
Official figures showed 517,000 jobs were created last month, taking unemployment to 3.4 percent, the lowest level since 1969. The number was much higher than expected, as economists had forecast a gain of 185,000.
It boosted the dollar and beat the pound, which fell below $1.21 after trading above $1.22 earlier in the day.
A weaker pound benefits many businesses in the Footsie that make money abroad, such as in the US, because the money is worth more when it is brought back to the UK.
But analysts noted that the hot job market is likely to lead to more rate hikes by the Federal Reserve, which is trying to bring inflation down to 2 percent.
Boost: Official figures show 517,000 jobs were created last month, pushing unemployment to 3.4 percent, the lowest level since 1969
“Investors were hoping for further indications of a weakening US labor market that could allow the US Fed to moderate its rate hikes,” said Rob Clarry of financial services firm Evelyn Partners.
“While this doesn’t necessarily spoil that story, it could discourage the interpretation that there will be just one more 0.25 percent hike before the Fed’s much-publicized ‘pause’,” he added.
The US central bank raised hopes that the pace of rate hikes could be eased earlier this week with an increase of 0.25 percentage point to 4.5 percent-4.75 percent. It was lower than a half-point increase in December and a series of three-quarters-point increases last year.
But the jobs numbers are likely to lead to speculation of steeper increases returning to subdued inflation. The data did not seem to increase wages, with hourly wages rising just 0.3 percent month-on-month, despite a year-over-year wage increase of 4.4 percent, nearly double the historical average.