The U.S. payroll growth was revised from the previous number to 311,000, and Wall Street feels the pressure of higher interest rates.
The job market in February came in lower than the previous month’s payrolls of 504 new jobs, but the market continues its string rally, beating market expectations by a mile. The released report on Friday by the U.S. labor department shows that U.S. payrolls rose by 311,000 in the past months, significantly higher than the early forecast of 205,000 new jobs.
Reuter’s specialists have suggested that the U.S. economy must be able to add at least 100,000 per month to keep up with market demand and the working-age population. Until now, the U.S. economy was able to deliver an outstanding labor market. At a faster rate, the market is finally collapsing.
The labor department reports also added that the number of daily working horses has been revised from the previous number. The average hourly earnings were revised from the previous percentage of 0.3% to 0.2%. Despite the fast growth and the collapsing market unemployment, the payroll report also shows that the unemployment rate has increased considering the effects the U.S. was making in these past months. The unemployment rate in the U.S. rose by 0.2% from 3.4% to 3.6%.
Moving to individual sectors in the U.S. market, the leisure and hospitality sector added 105,000 new jobs last month, which is a third of the total. In terms of their normal and pre-pandemic levels, the sectors remain relatively low by 410,000 positions.
The second largest beneficiary of payroll growth this month is professional and business services, which enjoyed a total of 45.000 jobs.
The U.S. manufacturing workforce was revised downward from the previous month by 4000 jobs, and construction added 24.000 jobs.
That pretty much sums up Friday’s payroll report, however, Wall Street knows that good data will only encourage Federal Reserve officials to maintain higher interest rates longer than expected.
It’s in the hearts of FED officials and monetary policymakers to combat inflation and bring it back to its pre-pandemic normal levels of 2–3%. On Tuesday, the FED chairman said in his congressional speech that his department is more focused than ever on its ongoing battle with inflation.
That means a 50% interest hike is back on the table, and inventors fear that from now on, this will be the regular key interest rate.
As of 4:00 pm ET, the S&P 500 benchmark fell by 1,46% to 3,386.66 basis points, and the Nasdaq index fell by 1,73% to 11,143.05 basis points. The pressure of a higher interest rate also affects other indexes, including the Dow, which declines by 0.99% to 31.935.01 basis points.
The U.S. dollar index fell by 0.47 percent and remains in a range of 103 and 104.
As for the U.S. bonds, the strong job growth data helped cool down the U.S. 10-year Treasury yields. The benchmark fell by 5,77% to 3.690.