Us Unemployment Rate Jump Higher

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Us Unemployment Rate Jump Higher

Us Unemployment Rate Jumped To 3.9% At 2 Year High

The month of February was a good one for the US labour market as job growth showed an upward trend. However, this was still not enough to lower the unemployment rate, which has reached 3.9%, a two-year high amid weak labor market conditions.

According to the Labor Department, the wage growth shows a modest jump, but the unemployment rate has moved from 3.7% to a high of 3.9%. Considering how unemployment remained near 3.7% for around 3 months in a row, the recent reading paints a bad picture of the US labor market.

Rate Cut Expected In June 2024

Some economists believe that the recent report of wage growth and a jump in the unemployment rate means the Fed now has more reasons to cut rates in June 2024.

Despite the jump in the unemployment rate, the labour market continues to keep the economy supported. After all, the US economy has managed to outperform the other major economies which is a feat in itself.

According to BMO Capital's economist, the job report shows that the labor market continues to get weaker despite the strong NFP. This is a sign that the labor market is undergoing rebalancing and will enable the US economy to achieve a soft landing.

Given all of this, it makes sense to think that the first rate cut from the Fed will likely happen in the middle of the year 2024.

The last NFP report showed an addition of 275,00 jobs, which was around 167K lower than the December & January readings.

As per the economist's forecast, around 200K jobs were expected in February, while others cited numbers between 125K - 286K.

Another survey shows that household employment has gone down by 184K during the last month. If we use the NFP's methodology, it means a decline of 271K in household employment.

Amidst all of this, many economists now believe that March's report will likely show a lower revision of February's report as well.

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