US labour market: Back to normal – Nordea Markets

Anders Svendsen, analyst at Nordea Markets, points out that the US Nonfarm payrolls increased by 196k in March, back to normal after the weak February.

Key Quotes

“The unemployment rate is unchanged at 3.8% and in line with consensus expectations. The broad unemployment rate remains unchanged too at 7.3% and average hourly earnings increased only by 0.1% m/m after 0.4% in February.”

“In total, today’s labour market report is “back to normal” – or close to recent year’s trend – of around 200k after the weak February. A stable unemployment, a stable broad U6 unemployment rate, and weak wage growth all support the Fed’s patient stance and the view that the Fed might be done hiking, despite the remaining one hike for next year in the March dot-plot.”

“In that way, today’s report is mildly rates-negative, USD-negative and bullish equities. The labour market is mostly a lagging indicator and will not be a useful guide for those calling for the Fed to cut rates.”