175,000 new jobs in the US in April – E24

The “most important figure for this month” was lower than expected. The dollar and government interest rates fall, while there is a rise in stock markets.

175,000 new nonfarm jobs were created in the United States in April. He appears Nonfarm Payrolls Jobs Report From the American authorities.

Analysts had previously expected 240,000 new jobs to emerge last month, according to estimates obtained by Bloomberg.

Jobs numbers have been surprisingly strong recently, before growth slowed this month. In March, 315,000 new jobs were created, according to recently revised figures.

The sensitivity of market interest rates means that bad numbers become good news. That's enough to give hope that interest rate cuts might eventually come from the central bank, but I think you'll probably have to wait until November before that happens, Olaf Chen, head of global personalization and attention at Storebrand, tells E24.

The Nonfarm Payrolls report is an important indicator of how the US economy is performing. The number of new jobs is sometimes referred to as “the most important number of the month,” and the market follows it closely.

Along with price growth, the labor market is one of the most important things the US central bank, the Federal Reserve, looks at when setting interest rates.

In addition to job growth, the report contains unemployment figures and wage growth in the United States. The unemployment rate rose to 3.9 percent, higher than expected, while wage growth moderated more than expected to 3.9 percent.

Dollar weakens and Wall Street rises

In currency markets, the US dollar weakened shortly after the jobs numbers were released.

Against the krone, the dollar rose from 10.89 shortly before, to a cost of 10.81 Norwegian krone shortly afterwards. The price of the dollar is 10.84 Norwegian kroner at 3.30 pm. The value of the krone also strengthened earlier today after the Norwegian Central Bank's interest rate meeting.

At the same time, the dollar weakened against other currencies such as the euro and the Japanese yen.

US Treasury yields also fell. the important A ten-year-old AmericanA ten-year-old AmericanUS government bonds with a maturity of ten years The growth rate is about 4.48 percent, compared to 4.55 percent shortly before the jobs numbers were released.

In the stock markets, there is a rally on Wall Street. The S&P 500 collective index rose 1.2 percent in early trading, while the Nasdaq technology index rose 1.8 percent.

Belief in U.S. interest rate cuts has generally declined sharply in recent months, but rose slightly again on Friday. The market is now fully calculating that the first rate cut will come in September. A second rate cut during all of 2024 is also priced in.

– Increases the chance of lowering the interest rate

This is exactly the kind of jobs report the central bank wanted, says Seema Shah of Principal Asset Management.

– The first payroll surprise on the downside in several months, combined with slowing wage growth, will bring the interest rate cut conversation back into the market, Shah tells Bloomberg.

At the same time, Shah stresses that this must be the beginning of a trend of further interest rate cuts this year to become relevant.

Chris Larkin of Morgan Stanley's E*Trade thinks the report may have made Fed members smile, although he doesn't think it makes it appropriate to cut rates in June.

— but unless this turns out to be an aberration, it will increase the chance that the Fed can get at least one rate cut this year, Larkin says according to Bloomberg.

The decline in inflation has stopped

-For the Fed, this is positive. To the extent that this contributes to slightly reducing labor market tightness which could bring inflation towards target, it is positive that the interest rate will be cut, says Olaf Chain about today's jobs report.

The US economy has performed better than many expected this year, and unemployment has remained low for an extended period.

This is despite the fact that US interest rates have risen sharply in recent years, in the face of high price growth.

Inflation rates have calmed down a lot since their peak, but the trend has started to point in the wrong direction recently. In March, inflation rose to 3.5 percent. In its interest rate decision on Wednesday, the US central bank indicated no progress towards the 2 percent inflation target.