Wall Street’s primary stock indices experienced a rise following the release of the March jobs report, which surpassed expectations and showcased the strength of the labour market.
This robust performance, however, suggests that the Federal Reserve may not be quick to reduce interest rates.
Experts praised the Labor Department’s report, which revealed that nonfarm payrolls swelled by 303,000 jobs in March, significantly higher than the anticipated 214,000. The unemployment rate dropped to 3.8%, slightly better than the forecasted steady rate of 3.9%. Average monthly wages also saw a growth of 0.3%, aligning with predictions.
David Waddell, CEO at Waddell & Associates, observed, “The key takeaway from the data is the average hourly earnings growth slowing to 4.1% annually, the lowest since June 2021. While the employment figures are robust, they also indicate easing inflation pressures, making the report more palatable for the market. Essentially, this doesn’t fundamentally alter the existing scenario.”
Financial markets are now estimating around a 56% likelihood of a minimum 25 basis point rate reduction by the Federal Reserve in June, with expectations for the initial cut being deferred. Post-jobs report, traders anticipate the first rate cut to occur by September, a shift from the previously expected July timeline.
The Dow Jones Industrial Average saw a gain of 51.48 points, or 0.1%, standing at 38,648.46. The S&P 500 increased by 14.55 points, or 0.3%, reaching 5,161.76, while the Nasdaq Composite rose by 41.12 points, or 0.3%, to 16,090.20.
