Wall Street ends in green after modest Fed rate hike
February 2, 2023
Le Fonti Interview 2/3/23
February 3, 2023NEW YORK, Feb 3 (Reuters) – U.S. job growth accelerated sharply in January amid a persistently resilient labor market, but a further moderation in wage gains should give the Federal Reserve some comfort in its fight against inflation.
The Labor Department’s closely watched employment report’s survey of establishments on Friday showed that nonfarm payrolls surged 517,000 jobs last month. Data for December was revised higher to show 260,000 jobs added instead of the previously reported 223,000.
STOCKS: U.S. stock index futures fell sharply after the strong jobs report BONDS: U.S. bond yields rose after the jobs data.
FOREX: The dollar gained after the data.
COMMENTS:
THOMAS HAYES, CHAIRMAN, GREAT HILL CAPITAL LLC, NEW YORK
“I don’t think anyone expected such a jump in non-farm payroll creation so the Fed is looking to the labor market to give it an indication of when it can pause and with numbers like these, they’re going to at least have another hike, if not more, to try to cool the economy, to meet their objectives.”
“My guess is it will be revised down next month but just looking at this, no one could have expected it because you spent the last four weeks with daily headlines of companies laying off 10% of their workforce, and here we are with this pretty massive job creation.”
“Good news in the sense that the economy is much stronger than most people expect but bad news if you’re hopeful that the Fed is going to immediately pause.”
RANDY FREDERICK, MANAGING DIRECTOR, TRADING AND DERIVATIVES, CHARLES SCHWAB IN AUSTIN, TEXAS
“The non-farm payroll number was huge. The unemployment rate has fallen to the lowest level since 1969. It was 3.1% in 1953, so you have to go that far back to get lower.”
“I’m surprised to see futures dip further. We’ve seen inflation numbers come down since June of last year. If you can do that and keep the labor market strong that’s the perfect soft landing the Fed’s been looking for.”
“This number is so large it’s maybe causing concerns that the March rate higher will be higher than the 25 bps hike that was expected.”
“I’d say that market got ahead of itself betting that the March rate hike would be the last one. I’d thought that before today but this may confirm that.”
“Wages are not the concern this month it’s the increase in payrolls.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK
“On the surface this is a strong labor report. However, the good news is that hourly wages were basically the same as last month. We’ve had a big run up here in stock prices. So obviously this is going to deflate the recent rally.”
“In terms of interest rates, this means that at least two more rate hikes are on their way.”
