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Analysts at ANZ explained that the data highlight the fundamental strength of the US economy, despite the geopolitical malaise and trade uncertainties.

Key Quotes:

“NFP beat expectations at 223k, with the unemployment rate down a tenth to 3.8%.”

“Wage growth was also better than expected, up 2.7% y/y or 0.3% m/m. Separately, Costco hiked wages for 130,000 workers, highlighting the pressure to keep employees on the payroll.”

“Meanwhile, the ISM came in stronger than expected at 58.7 (last: 57.3), the details were also broadly positive. Notably, pricing indicators continue to climb.”

“A June hike looks locked, in line with the recent Fed-speak that confirmed the outlook has not changed despite market volatility and Italian jitters.”

“Late in the US session, the Fed’s Williams said neutral is about three rate hikes away and that the Fed does “not necessarily” need to pause once they reach neutral.”