At the Financial Times, Claire Jones and Kate Duguid report on downgrades in job creation numbers that put into question the strength of recent reports. They write:
The US economy added 275,000 jobs last month, beating forecasts, but big downgrades to previous figures complicated the outlook for the US economy.
The non-farm payroll figures for February surpassed economists’ predictions of 200,000 new jobs and indicated that the US services sector remains strong.
However, February’s 275,000 jobs number was eclipsed by the revised totals for January and December, when 167,000 fewer posts were created than previously thought.
Immediately following the report, traders increased bets on faster and earlier interest rate cuts, but later reversed course.
Pricing in the futures market shows traders believe the Fed will cut interest rates for the first time as early as June, followed by two or three more cuts later in the year.
In their December “dot plot”, Fed officials indicated they expect to cut interest rates three times this year. They will release their latest forecasts at their upcoming meeting in March.
“The downward revisions to previous months’ gains leave recent growth looking less strong than previously thought,” said Capital Economics, a consultancy, in a note.
Read more here.
