US non-farm payrolls jump past forecasts in March

According to the U.S. Department of Labor, in seasonally adjusted terms non-farm payrolls increased by 303,000 in March.

Economists had penciled-in an increase of 200,000.

On the back of Friday's non-farm payrolls report, Fed funds futures moved to fully price in a first 25 basis point interest rate cut by the Federal Reserve in September.

Furthermore, revisions to the prior two months' worth of payrolls data were positive to the tune of 22,000.

Average hourly earnings were up by 0.3% month-on-month, as expected, as average weekly hours rose from 34.3 to 34.4.

The other details of the report were also strong, with the rate of unemployment ticking lower by one tenth of a percentage point to 3.8%.

Employment and the labour force participation rate both rose strongly.

Possibly more significant however was a 469,000 increase in the size of the civilian labour force to 167.9m, a development that some linked to ongoing heavy immigration.

Public sector hiring was especially strong in comparison to its trend, jumping by 71,000, led by local government hiring excluding education, alongside a 81,300 increase in health care.

Hiring in Leisure and Hospitality was up 49,000.

Kathleen Brooks at XTB said recent strong growth in public sector jobs might reflect a hiring blitz before the election.

Other commentators noted that the mild weather might have impacted on employment in Construction and Travel Leisure.

"The blockbuster 303,000 increase in non-farm payrolls in March supports the Fed’s position that the resilience of the economy means it can take its time with rate cuts, which might now not begin until the second half of this year," said Paul Ashworth, chief North America economist at Capital Economics.

"The rest of the report was equally as strong as the headline payrolls number, with a near-500,000 gain in the household survey measure of employment driving a drop back in the unemployment rate to 3.8%, from 3.9%."

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