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The US economy created 143,000 jobs in January, and was not forecast, but lower unemployment and strong revenue earnings underscored the strength of the American labor market.
January figures are below expectations in the Reuters poll of 170,000, but the Bureau of Labor Statistics revised its December bumper figure from 256,000 to 307,000.
Economists and traders highlighted that the January unemployment declined from 4.1% in the previous month.
Job data on Friday comes more than a week after the Fed held up interest rates between 4.25 and 4.5 percent despite pressure on reducing borrowing costs from President Donald Trump.
Diane Swonk, chief economist at KPMG US, said lower unemployment and increased labor market participation provided “why the Fed feel comfortable” in its decision to slow the pace of interest rate cuts this year I did.
Additionally, average hourly revenues have increased by 4.1% over the past 12 months. This has been adopted by economists as a sign of sustainable health in the US labor market.
The market expects the next Fed rate cut to arrive by July, with another 60% chance by the end of the year, barely changing from expectations prior to employment reporting.
Tracking interest rate forecasts, the two-year financial yield, which is inversely proportional to price, rose 0.06 percentage points to 4.26 percentage points, and the 10-year yield added 0.04 percentage points to 4.48 percentage points.
Inventory futures extended the small decline, with contracts falling 0.2% over the S&P 500.
