There is a strong jobs growth in US, the economy added 235,000 jobs in February. The Bureau of Labor Statistics stated that the unemployment rate fell to 4.7%. The US Federal Reserve, Fed, would increase interest rates because of this.
Federal Reserve chair Janet Yellen stated last week that the central bank could boost rates in March if employment and inflation figures met their expectations. The BBC reports that job gains last month were boosted by 58,000 new construction jobs. The growth in new US jobs has been gathering pace lately.
Craig Erlam, senior market analyst at OANDA, states that the labour market is strong. When unemployment rate falls too much, this increases the chances that the Fed will increase interest rates. US has been growing lately and also the jobs available.
Strong labour market
Employers in the US have added more than two million jobs the last 12 months, and the latest statistics show that labour market strength continued into February. For the Fed, one of the main issues is the continued job growth is likely in time to contribute to higher wages and inflation. Financial markets were already expecting that the Fed will try to avoid a rise in inflation by raising interest rates at a policy making meeting next week.
Today's statistics reinforce that expectation. The Fed increased interest rates in December to a range of 0.5% to 0.75% - just the second rise in a decade. Alan Gayle, of Ridgeworth Investments, stated that the operative message is that the labour market continues to strengthen, and that is likely to give the Fed a green light to boost interest rates when they meet next week.
Paul Ashworth, chief US economist at Capital Economics, stated that the number of jobs added in February would erase any doubts that the Fed might not hike interest rates. He also stated that it will be greeted with a cheer from the White House. President Donald Trump has promised to create 25 million jobs over 10 years.