US jobs hold strong dampening talk of interest rate cuts

Hiring in the US was unexpectedly strong last month, as the American economy continued to defy forecasts of a slowdown.

Employers added 216,000 jobs and the unemployment rate was unchanged at 3.7%, the Labor Department said.

Government hiring drove the gains, which extended one of the strongest streaks of job creation on record.

The growth has confounded forecasters expecting job losses as higher borrowing costs slowed the economy.

But it has raised hopes that the US central bank will be able to get a grip on inflation without triggering a painful downturn.

All told, the US added 2.7 million jobs last year, slowing after a boom of 4.8 million in 2022 but comparable to pre-pandemic years.

Analysts said the signs of strength in the report should dampen speculation that the Federal Reserve will need to reverse course quickly and start cutting interest rates to shield the economy from damage.

"Jobs growth remains as resilient as ever, validating growing scepticism that the economy will be ready for policy rate cuts as early as March," Seema Shah, chief global strategist at Principal Asset Management said.

"Indeed, the recent run of labour market data generally point in one direction: strength."