Bankinter | Non-Farm Job Creation (April) beats expectations, but revises downward from previous record: 177K against 138K expected and 185K previous. Unemployment Rate repeats at 4.2% as expected and Average Wages/Hour remain at 3.8% year-on-year versus 3.9% year-on-year expected.
Bankinter’s analysis team’s view: The data as a whole is consistent and, therefore, positive in the current context in which the US economy finds itself. The labour market continues to show strength despite the impact of Trump’s trade policy (increased tariff tensions), the layoffs in public agencies carried out by the DOGE (Department of Government Efficiency) and the increase in deportations. Hopefully, upcoming employment reports will start to show the impact of the slowdown in the US economy. Still, we continue to expect only two more cuts of 25bp each from the Fed this year (September and December) to 3.75%/4.00%. With employment in good shape and higher inflationary pressures expected in 2H 2025 from tariffs, the Fed will continue to be more cautious in cutting rates than the market expects.
