United States interest rate rise nearly certain after bumper jobs growth
- Author: Zachary Reyes Mar 13, 2017,
Mar 13, 2017, 5:22
Robust hiring by American employers in President Donald Trump's first full month in power, along with rising wages, have economists tipping a faster-than-anticipated cycle of interest rate increases by the US Federal Reserve, beginning this week.
Minimum wage increases past year in 17 states and Washington, D.C., helped raise pay among the lowest-paid workers, the EPI found.
Wage growth, a key indicator that disappointed in January but had a strong showing in December, at 2.9 percent - the biggest uptick in seven years - also improved for February, hitting 2.8 percent year on year.
The unemployment rate dipped to 4.7 percent, compared with 4.8 percent in January. Eastern time, Trump retweeted a news report touting the job growth.
Paul Ashworth, chief United States economist at Capital Economics, said the number of jobs added in February would "erase any lingering doubts that the Fed might not hike interest rates next week".
The S&P 500 index showed 39 new 52-week highs and five new lows, while the Nasdaq recorded 74 new highs and 24 new lows.
Services-related employment was up 30,100 in February, versus a 14,800 decline in goods-producing. Cccording to the National Oceanic and Atmospheric Administration, last month was the second-warmest February on record in the contiguous 48 U.S. states, with an average temperature of 41 degrees Fahrenheit (5 degrees Celsius), about 7 degrees higher than the 20th century average. Employment rose in food manufacturing (9,000) and in machinery (7,000), while transportation equipment lost 6,000 jobs.
An array of evidence suggests that the USA job market is fundamentally healthy or almost so.
While unseasonably warm weather may have boosted the payrolls count, President Trump's first full month in office undoubtedly coincides with a surge in economic optimism following his election victory.
"Relative to consensus forecasts and current market pricing, we see the risks as tilted toward further tightening", Goldman economist Zach Pandl said. Growth is picking up or stabilizing in most European countries as well as in China and Japan.
US builders are breaking ground on more homes, and factory production has recovered from an 18-month slump, fueling growth and hiring.
The labor participation rate, which measures how much of the potential workforce is employed, inched up to 63.0 percent from 62.9 percent in January - still down from historically higher levels of around 67 percent in the 1990s.
Six of Connecticut's 10 major industry super-sectors added jobs in January, led by leisure and hospitality, which was up 3,100 positions.