'Stronger than expected' US jobs market shakes faith in imminent rates cuts
The BLS noted that employment continued to trend up in government, health care, social assistance and construction, while transportation and warehousing saw dwindling total jobs.
The figures also revealed that unemployment held at 3.7 percent in December, representing 6.3 million people.
The BLS noted that employment continued to trend up in government, health care, social assistance and construction, while transportation and warehousing saw dwindling total jobs.
US economy beats expectations with 199,000 jobs added in November
Neil Birrell, chief investment officer at Premier Miton Investors, said: «The US employment market is stronger than expected. It has been propped up by job openings in the healthcare, leisure and hospitality sectors, but it will be the aggregate level that the Fed looks at.
»With average earnings stronger than expected as well, it may be that market hopes for interest rate cuts are a bit too far from reality at the moment, and we will see expectations reined in. The consequences for bonds in particular could be negative in the short term."
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Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, added that the US labour market is not «losing steam», so economic activity will need a «heavier hand» to slow it down,, which could lead to interest rates cuts being delayed further.
«The resilience shown by the US labour market has been markedly stronger than predicted, which makes bringing things in line without triggering a rock-hard landing becomes a much more delicate task,» she explained.
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