Unemployment and NFP Release

With the US jobs market seemingly resilient, the Federal Reserve may look to increase US rates for longer to contain inflation. Recent FOMC minutes suggest that rates may have to be raised to 5%+ for some time to fight inflation, while other Fed officials have recently railed against market expectations that interest rates will fall this year. Later today, three Fed officials are set to speak, and their opinions on rates and the labor market could well dictate price action going into the weekend.

The first unemployment rate and Non-farm payroll of 2023 have been released. The forecast for NFP was 200k jobs, and the unemployment rate was 3.7%. In actuality, NFP came in at 223k, and the unemployment rate at 3.5%

Goldman Sachs had this to say: We are still in a suitable data is bad for stocks set up, but the new spin is that terrible data is also bad for stocks. AKA risk is skewed to the downside

JP Morgan had this to say: Payroll growth slowed to an average of about 60K per month in Q1 2023. Peak-to-trough job losses of over 1 million workers through 2Q24 as the US economy slips into a mild recession.

The economy is still strong, with better job market expectations and lower unemployment. With inflation still running at 7%, the Federal Reserve has more room to raise rates.

Raphael Bostic said: We need a target rate higher than 5%. I will be comfortable with a 25bps or 50bps point hike in February. With the potential to raise another 25bps in March and May, bringing the target rate to 5.25%.