U.S. stocks rose on Friday amid broad-based gains as a stellar job report underscored the strength of the economy, potentially giving the Federal Reserve enough ammunition to raise interest rates next week.
It may not have been the knockout non farm payroll that the ADP release on Wednesday indicated it could be, but today’s US jobs report was more than adequate to justify a rate hike next week, assuming of course that the markets have correctly interpreted the Fed’s very deliberate hawkish delivery over the last few weeks.
According to the Bureau of Labor Statistics, the U.S. economy created 235,000 net new jobs, well above economists' expectations of 200,000 new jobs. Crucially, the details to the report were similarly strong.
U.S. employers hired workers at a robust pace in February, beating expectations, and wages grinded higher, which could give the Federal Reserve the green light to raise interest rates next week despite slowing economic growth.
Total nonfarm payroll employment increased by 235,000 in February, and the unemployment rate was little changed at 4.7%, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in construction, private educational services, manufacturing, health care, and mining.
The run of gains on the financial market turns 8 years old on Thursday and, despite its advanced age, is expected to rage on, with perhaps a few hiccups, based on a combination of stronger company earnings, lower taxes and a corporate-friendly administration in Washington.
Sterling bears were unleashed during Wednesday’s trading session, with the British pound/U.S. dollar currency pair sinking to a fresh seven-week low at 1.2150 as investor anxiety heightened ahead of the UK Spring Budget speech. Treasury chief Philip Hammond will be in the limelight today, and is set to provide some insight on the UK government’s financial plans as it embarks on its quest to exit the European Union.