The American labor market continues to perform robustly. In March, 228,000 jobs were added outside the agricultural sector, the Bureau of Labor Statistics reported Friday. Economists had only counted on 135,000 new jobs in advance. It is also striking that the figure has been adjusted for February from 151,000 to 117,000, which increases the surprise of the March figure even greater.
Unemployment increases despite strong growth
Despite the strong job growth, the unemployment rate rose unexpectedly from 4.1% to 4.2%. Analysts had predicted a stabilization at 4.1%. This apparent contradiction underlines the complexity of the current economic climate and does not make the policy process for the US Central Bank any easier.
Interest in interest rates are shifting
Prior to the job report, the market, based on the CME Fedwatch Tool, took into account four interest rates in 2025. This would reduce American policy interest to a bandwidth of 3.25%–3.50%. Although the Federal Reserve is not expected to take a step in May, the chances of a first reduction in June are increasing. Currently the market estimates that chance of 60%.
Trump rates provide market panic
The publication of the strong job report follows a chaotic week for the financial markets. On Wednesday evening, President Trump announced new import tariffs, which led to a major sale on Thursday: the Nasdaq lost 6%, while the S&P 500 handed in almost 5%.
Hoping for recovery turned out to be in vain when China came up with retaliation measures on Friday morning, including counter -duties on American goods. Futures of both indexes pointed to a further fall of around 3.5%.
Investors are looking for safety: gold, bonds – and maybe Bitcoin?
In response to the geopolitical tensions and the market zoning, investors massively resort to safe ports. The price of gold remains close to its record level of $ 3,200 per ounce, despite a small correction after the rate news. The demand for American government bonds is also strong: the interest on 10-year treasuries fell to 3.89%, almost a full percentage lower than with Trumps inauguration.
And then there is Bitcoin (BTC). Although the race has been strongly assured with the falling tech markets in recent weeks, there seems to be a possible decoupling on the way. During the correction on Thursday, BTC managed to stand above $ 80,000, despite the sharp fall in the Nasdaq. On Friday morning the currency recorded almost flat around $ 82,600 – a sign of resilience in the middle of market stress.
What does the next test bring?
The next major economic indicator follows next week, when the American inflation figures are published for March. Both the core inflation and the General Consumer Price Index (CPI) are still estimated at around 3%. This data will be crucial for the interest rate policy of the Fed and the direction of the markets.
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Source: https://newsbit.nl/amerikaanse-arbeidsmarkt-verrast-opnieuw-228-000-nieuwe-banen-in-maart-ver-boven-verwachting/
