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The US economy created more jobs than expected last month, but average pay stagnated, according to the latest official labour report from the world’s largest economy.
Non-farm payrolls grew by 242,000 in February, against the 190,000 consensus estimate. But averages wages fell by 0.1 per cent month on month despite expectations of a 0.2 per cent increase.
Financial markets gave the data a mixed reception with the dollar index first rising then dropping. American 10-year Treasury yields rose by about 7 basis points to 1.89 per cent.
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Analysts disagreed on the possible impact of the data on interest rate decisions by the Federal Reserve. “With employment rising at a rapid pace and labour market slack still shrinking, we think the Fed will resume raising interest rates in June,” Paul Ashworth, of Capital Economics, said. Luke Bartholomew, at Aberdeen Asset Management, said the data would “scotch suggestions that the US is about to rip into recession”.
But Lena Komileva, of the research firm G+ Economics, took a more downbeat view. “What matters for the markets is whether February’s strong jobs report changes the policy calculus behind a possible March Fed rate hike,” she said. “The answer, in a word, is ‘no’. A US slowdown is under way, led by weaker global demand conditions and not helped by emerging markets weakness and the dollar’s strength.”
The Fed, chaired by Janet Yellen, raised rates in December for the first time in almost a decade. But the turmoil in global financial markets since then has caused financial markets to discount the likelihood of another rise this year.
The overall American unemployment rate remained at 4.9 per cent.
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