The US job surge casts doubt on any rate cuts.

The world’s largest economy continued to boom last month, with employers in the US adding more than 300,000 jobs, the greatest increase in over a year.

The US job surge casts doubt on any rate cuts.
The US job surge casts doubt on any rate cuts.

 

According to the Labor Department, the unemployment rate decreased to 3.8% as most industries added jobs, including the government, construction, and health care. It was another month of growth that was higher than anticipated. Approximately 200,000 job gains were anticipated by economists.The robust numbers, according to analysts, might postpone a US interest rate reduction.

At a range of 5.25% to 5.5%, the US central bank’s key interest rate is presently at its highest point in over 20 years.

The Federal Reserve was predicted by analysts to begin reducing rates this year in order to prevent a severe downturn brought on by excessive borrowing prices.

A stronger-than-expected economy, however, has cast doubt on the timing of those cuts.

“The blockbuster 303,000 increase in non-farm payrolls in March supports the Fed’s position that the resilience of the economy means it can take its time with rate cuts, which might now not begin until the second half of this year,” stated Paul Ashworth, chief economist at Capital Economics. In an attempt to curb the economy and lessen the pressures driving up prices at the quickest rate in decades, the Fed hiked interest rates significantly in 2022.Since then, price inflation in the US has decreased, falling to 3.2% in February, avoiding the significant increase in unemployment that some had anticipated would come along with the rise in borrowing prices.

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US keeps interest rates unchanged but warns of impending cuts

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