Market Wire, North America

The US economy generated far stronger wage growth and more jobs than expected in January, driving yields and the dollar higher, while almost certainly taking a March rate cut off the table. According to data released by the Bureau of Labor Statistics this morning, 353,000 jobs were added, and the unemployment rate held steady at 3.7 percent, remaining near historic lows. Average hourly earnings rose 0.6 percent month-over-month, up 4.5 percent year-over-year, solidly topping expectations for a 4.1 percent increase. Ahead of the release, consensus estimates had pointed to a 185,000-job gain, and the unemployment rate was seen moving up...

For a fourth consecutive meeting, the US Federal Reserve’s policy committee held benchmark borrowing costs at a 23-year high, and signalled a desire to keep rates at prevailing levels for now. In a distinctly non-committal statement, the Federal Open Market Committee said it “judges that the risks to achieving its employment and inflation goals are moving into better balance,” but avoided telegraphing imminent cuts, warning that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent”. Language that previously referred to the possibility...

The Federal Reserve’s preferred inflation measure softened to a near-three-year low in December, but personal spending continued to rise, helping further ratify expectations for a soft landing in the US economy – while slightly complicating the outlook for rate cuts. Data released by the Bureau of Economic Analysis this morning showed the core personal consumption expenditures index rising 0.2 percent in December from the prior month, bringing the three-month annualized pace down to 1.5 percent, well within the central bank’s target range. On a year over year basis, core price growth slowed to 2.9 percent from 3.2 percent prior, and...