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The US added 177,000 jobs in April, beating expectations and defying worries about the early impact of Donald Trump’s policies on the world’s largest economy.
Friday’s figure from the Bureau of Labor Statistics exceeded the 135,000 predicted by economists polled by Bloomberg. But it marked a fall from March’s downwardly revised number of 185,000 posts.
The unemployment rate was unchanged at 4.2 per cent.
S&P 500 futures extended gains after the data publication, trading 1.2 per cent higher ahead of the New York open.
The yield on two-year Treasuries, which tracks interest rate expectations and moves inversely to prices, rose 0.08 percentage points to 3.78 per cent as investors bet that the US Federal Reserve would keep borrowing costs higher for longer because of the strong jobs number.
“People were fearful of a downside surprise that wasn’t forthcoming,” said Mike Riddell, a government bond fund manager at Fidelity International.
Traders in the futures market scaled back expectations of interest rate cuts this year, though are still betting on three or four cuts this year, beginning in July.
“THE FED SHOULD LOWER ITS RATE!!!” Trump posted on his Truth Social network shortly after the jobs data came out, as he hailed “employment strong, and much more good news”.
The numbers come after mass firings of thousands of federal employees by Elon Musk’s so-called Department of Government Efficiency.
Friday’s data indicated that federal government employment declined by 9,000 in April and by 26,000 since January.
Claudia Sahm, chief economist at New Century Advisors, said that while Trump’s economic policies were “anything but subtle” their initial impact was “relatively small”.
She added that it would take time for them “to work through the system, which means the Fed is going to wait,” and that any cuts were likely later in the second half of the year rather than at the central bank’s meetings during the next two months.
Official data this week indicated the first fall in GDP for three years, but was distorted by a surge in imports ahead of Trump’s trade tariffs, with domestic demand remaining strong.
Many economists anticipate that the duties will act as a drag on underlying growth in the second quarter of the year.
“Overall this is an indication that the labour market is not deteriorating yet,” Gennadiy Goldberg, head of US rates strategy at TD Securities, said of Friday’s job data. “But investors are still nervous that another shoe will drop. We just don’t know when.”
Additional reporting by Ian Smith in London
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