US: Employment numbers weakening – Danske Bank

On Friday, the US employment report came out slightly to the weak side as payrolls rose by 103k in March, i.e. below consensus of a growth of 188k, notes the research team at Danske Bank.

Key Quotes

“Unemployment in March was higher than expected at 4.1%, unchanged from February. The underemployment rate fell from last month, which was the only real strong number. Average hourly earnings increased by 2.7% in line with consensus and our expectations.”

“Friday's numbers will, in our view, not change the Fed's rate hiking cycle. This was supported by Fed Chair Powell's gradual-hikes-warranted speech on Friday, where he said that ' we will continue to aim for 2 percent inflation and for a sustained economic expansion with a strong labour market'' and ' as long as the economy continues broadly on its current path, further gradual increases in the federal fund rate will best promote these goals' . We still expect the Fed to hike rates twice more this year, in June and December (though with a risk of a third additional hike) and another three hikes next year.”