Friday’s employment report delivered another upside surprise with more than 300,000 jobs added in March, beating the consensus forecast of economists by nearly 100,000 jobs.1 March payroll growth represented another example of economic forecasters underestimating the resilience of the U.S. economy, particularly the strength of the labor market. The equity market took the stronger data in stride, but Treasury rates are opening the week at the highest levels of the year. The bond market continues to extend the timeline for the start of Federal Reserve (Fed) rate cuts, with a June cut now likely off the table.
Investors will shift their focus to inflation data this week. The Consumer Price Index (CPI) will be released on Wednesday, followed by the Producer Price Index (PPI) on Thursday.2 After generally disappointing inflation data this year, Fed Chair Jerome Powell needs better numbers this week to align with his “dovish” monetary policy narrative.
Sources:
1CNBC – Job growth zoomed in March as payrolls jumped by 303,000 and unemployment dropped to 3.8%; 4/5/24
2MarketWatch – U.S. Economic Calendar; as of 4/8/24
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