USA added 235k jobs in February, making Fed rate hike likely

That became a foregone conclusion after the Labor Department announced last Friday that there were 235,000 new jobs created in February and that the unemployment rate declined by one-tenth of a percentage point, to 4.7 percent.

Shepherdson said current trends suggested the unemployment rate could hit 4.5 percent before June, when he expects the Fed to again raise rates.

The annual unemployment rate for post-9/11 veterans was 5.1 percent previous year, the lowest on record for the youngest generation of veterans.

Last month’s hiring was boosted by 58,000 additional construction jobs, the most in almost a decade.

Since service-based employers aren’t as quickly impacted by higher interest-rates, you have a labor market that can absorb hikes more easily than in the past. The 58,000 gains followed a 40,000 construction increase in January.

While generally supportive of raising rates, Brainard said so-called core PCE, an inflation measure that excludes volatile food and fuel prices, has been below the Fed target for most of the past eight years. But it remains to be seen just how many more people will be entering or returning to the labor market and how much employers may need to bid up wages to entice them. Last month’s brisk clip of hiring was accompanied by steady wage growth, with average hourly earnings rising 6 cents, or 0.2 percent.

GCC economies with pegged currencies are expected to face further rise in cost of funds and impact of currency appreciation starting the week ahead.

The growth in new USA jobs has been gathering pace in recent months, and there were other signs that United States businesses continued to gain strength in February. If warm weather did help elevate construction hiring in February, for example, it might also have the effect of subtracting from job growth that would normally occur in early spring.

The solid job market has long outperformed the slow-growing economy. And the unemployment rate has remained below 5 percent since May.

The February jobs data likely provides the final piece of evidence the Fed needs to feel confident enough to raise rates next week for the third time in 15 months.

The economy already appears closer to its goals than the Fed had expected in December, the last time it released forecasts.

It may speed up if the economy accelerates because of possible tax cuts, looser regulations and infrastructure spending from President Donald Trump and a Republican-controlled Congress, they said. As for explaining tightening now rather than waiting until later in the year, “it is better from their perspective to take the opportunity when they have it, when they are confident about the prospects for the economy”, he said. Many small businesses are complaining that they can not find workers with the qualifications they need. “The risk of higher inflation could point to future interest rate trajectory”, said Tim Fox, chief economist of Emirates NBD.