The U.S. labour market continued to grow in March but not at the rate economists expected. However, the U.S. employment rate has still managed to stay at its lowest level since February 2001.
According to the U.S. Bureau of Labor Statistics, the U.S. economy created 103,000 jobs in the non-farm sector in March. The latest figures also include upward revisions to previous employment numbers. February’s figure was revised up from +313,000 to +326,000 and the January number was revised up from +175,000 to +176,000.
The market’s expectation for employment growth during the month was for +185,000 additional positions. U.S. financial markets reacted by sending yields lower, although allowance should be made for the presence of a “risk-off” theme as U.S.-China trade tensions ramped up. By the end of the day, 2 year bond yields were 3bps lower at 2.27% while 10 year yields and 30 year were both 5bps lower at 2.78% and 3.02% respectively. The U.S. currency was weaker against major currencies except for the Aussie. According to cash futures prices, the implied probability of a rate rise by the U.S. FOMC at its June meeting moved down from 85% to 80%.
After revisions to previous months’ figures, the unemployment rate remained unchanged at 4.1% as the total number of unemployed people shrank by 121,000 to just under 6.6 million while the total number of people employed in both the farm and non-farm sectors decreased by 37,000.