by Lucia Mutikani
WASHINGTON (Reuters) – The U.S. economy continued to add jobs at a healthy pace in March, the jobless rate fell to its lowest level in more than two years and wage growth accelerated, shows on Friday the Labor Department’s monthly report, which provides arguments for the Federal Reserve to quickly raise interest rates.
This report, closely followed by economists and investors, reports 431,000 non-agricultural job creations last month, while economists and analysts polled by Reuters forecast an average of 490,000. But the figures for January and February have been revised upwards, by 95,000 in total.
The unemployment rate fell to 3.6% last month, the lowest since February 2020, while the consensus gave it at 3.7%.
At the same time, the average hourly wage increased by 0.4% in March, after +0.1% the previous month, and its increase over one year reached 5.6% after 5.2%.
The US labor market remains supported by the sharp drop in the number of COVID-19 cases in the United States, which supports the lifting of health restrictions across the country. At the same time, the war between Ukraine and Russia, even if it is fueling the rise in prices at the pump, does not seem to have any impact on employment for the moment.
These figures, which confirm the good health of the American economy, could allow the Fed to accelerate the raising of its interest rates in an attempt to curb inflation, which has become its main concern.
The central bank already raised its main rate by a quarter point last month, its first hike in more than three years, but markets are now questioning the pace of policy tightening in the coming months, part investors are counting on a rise of half a point at the next meetings.
The employment figures published on Friday and those of consumer prices expected on April 12 could therefore weigh heavily in the decision that the Fed will take after its next meeting on May 4.
Treasury yields amplified their rise after the release of the Labor Department report and around 12:50 GMT, that of two-year securities showed a jump of 15 basis points to 2.4361% while the ten-year took nearly ten points to 2.4244%.
At the same time, the dollar appreciated by 0.24% against a basket of reference currencies and futures contracts on the main Wall Street indices foreshadowed a slightly higher opening.
(Report Lucia Mutikani, French version Marc Angrand)
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