Reaction to US nonfarm payrolls (04/03/22)
by Shafiq Shabir
Head of Electronic Trading, Intertrader
The jobs market picked up in February where it left off after a stellar January, nonfarm payrolls rising by 678,000 jobs. Omicron has failed to take the wind from the sails of the ongoing economic boom in the US, and this is reflected in the sheer volume of jobs being created.
The big question is what this means for monetary policy. All things being equal, stronger than expected employment growth, coupled with other positive economic data over the last month and seemingly ever-increasing inflation, would virtually guarantee a sharp tightening, especially given Jerome Powell’s comments earlier this week – so the Fed will be under scrutiny to move quickly and decisively to hike rates at its next meeting.
But it is by no means a foregone conclusion. Markets have been incredibly nervous following the conflict in Ukraine, and the Fed will need to carefully consider its impact on the global economic recovery, supply chains, and inflation.
Published: 4 March 2022
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