Forecast beating US jobs do little to sway Fed rate hike outlook

Markets are not swayed that the Federal Reserve will hike rates more often this year even as data pointed to US job-market strength following Friday’s release of nonfarm payrolls data.

Non-farm payrolls rose by 215,000 in March, beating expectations of a 205,000 increase. February’s hiring spurt was also revised up from 242,000 to 245,000. Wages meanwhile rose 0.3% during the month, up 2.3% on a year ago.

Although the unemployment rate rose to 5.0%, up from an eight-year low of 4.9%, this was in part due to more people entering the labor market. At 63%, the participation rate was the highest since March 2014.

But many investors believe that the Fed will focus more on the struggling global economy than on domestic data as the potential for disturbances abroad could weigh on US growth. Fed Chair Janet Yellen in a March 29 speech cited slowing Chinese growth and the outlook for commodities prices as risks. It’s appropriate to “proceed cautiously” in raising rates.

Despite Friday’s forecast beating jobs data, the US dollar moved lower on Monday against the yen, to fall below the key 112 yen level to as low as 111.31 yen.

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