US Labor Market Heats Up In March: Payrolls Grow By 303,000, Highest In 10 Months, Dampen June Rate Cut Hopes (UPDATED)

Author: Piero Cingari | April 05, 2024 09:18am

Editor’s note: This story has been updated with additional details.

The pace of expansion in the U.S. labor market exceeded forecasts last month, dampening investor hopes for potential interest rate cuts by the Federal Reserve.

U.S. employers added 303,000 nonfarm payrolls in March, marking an increase from the 270,000 reading in February and surpassing the expected 212,000, the Bureau of Labor Statistics said Friday.

March’s Jobs Report: Key Highlights

• Monthly nonfarm payrolls grew by 303,000, representing an increase of 33,000 from the previous month and marking the highest figure since May 2023. This topped economist expectations for an increase of 212,000.
• The unemployment rate slowed from 3.9% to 3.8%, easing more than expected.
• Average hourly earnings eased from 4.3% to 4.1%, in line with predictions.
• On a monthly basis, pay growth accelerated from the upwardly revised 0.2% to 0.3%, matching expectations.

Data	March 2024	Estimate	February 2024
Nonfarm payrolls	303,000	212,000	270,000
Unemployment rate	3.8%	3.9%	3.9%
Wage growth (YoY)	4.1%	4.1%	4.3%

Market Reactions

The unexpectedly strong jobs report intensified dwindling expectations for Federal Reserve rate cuts, a sentiment already weakened by hawkish remarks from Fed speakers on Thursday.

Market-implied probabilities assigned a 64% chance of a rate cut by June, prior to the jobs report, and fell to 53% following the robust employment reading.

The U.S. dollar index (DXY), as tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), rose 0.4% minutes after the release, and Treasury yields moved higher.

Futures on U.S. major averages trended higher during premarket trading on Friday following a negative session on Thursday.

Contracts on the S&P 500 were 0.4% higher at 8:55 a.m., while Nasdaq 100 futures rose 0.5%.

The tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) closed 1.5% a day earlier, marking the worst-performing day since late January.

As Treasury yields sharply rose, bond-related ETFs tanked with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) down 1.3%.

A stronger dollar and higher yields also exerted pressure on precious metals. Gold eased 0.1%, while silver plummeted 1.6%

Friday’s Premarket Stock Movers

Below is a list of mega-cap stocks – with a market cap above $100 billion – showing heightened price action following the March jobs report, as observed on the Benzinga Pro platform.

• Lowe’s Companies Inc. (NYSE:LOW), up 0.8%
• Caterpillar Inc. (NYSE:CAT), up 0.6%
• Mastercard Inc. (NYSE:MA) up 0.6%
• Booking Holdings Inc. (NYSE:BKNG) up 0.6%
• Adobe Inc. (NASDAQ:ADBE) up 0.5%

• Tesla Inc. (NASDAQ:TSLA) down 0.5%
• The Progressive Corp. (NYSE:PGR) down 0.6%
• McDonald’s Corp. (NYSE:MCD) down 0.7%
• AstraZeneca plc (NASDAQ:AZN), down 0.8%
• Toronto-Dominion Bank (NYSE:TD) down 1.4%.

Read now: Hawkish Fed Voices Lead To Market Slide: ‘It’s Possible Fed Won’t Cut This Year If Inflation Stalls’ (CORRECTED)

Photo via Shutterstock.

Posted In: ADBE AZN BKNG CAT LOW MA MCD PGR QQQ TD TLT TSLA UUP