Amazing, even if investors couldn’t immediately react to it because equities markets were closed for the Good Friday holiday.
According to the Bureau of Labor Statistics, the US economy added 916,000 jobs in March. That outperformed Wall Street forecasts of a 660,000 increase and came close to meeting BofA’s chief U.S. economist Michelle Meyer’s high-end forecast of 1 million.
Both January and February payroll changes were updated upwards: January’s payroll change was revised to 233,000 from 166,000 previously reported, and February’s employment increase was revised to 468,000 from 379,000 previously reported. Work growth was widespread, with a 280,000 rise in the leisure and hospitality sector leading the way.
Economists believe the report’s strength indicates that the economy will gain significant momentum through the summer as people receive their COVID-19 vaccines and continue to spend their stimulus checks. To use Roland’s phrase, “awesome growth” could be on the way.
“This is going to be the best growth we have seen since the 1980s and the best job creation we have seen in terms of composition since the 1980s,” RSM U.S. chief economist Joseph Brusuelas said on Yahoo Finance Live.
The big question right now is whether strong data like the March jobs report is fantastic news for investors. As economic data has improved over the last month, it has fueled inflation fears, sending the 10-year yield close to 1.8 percent.
While the S&P 500 reached a new high of around 4,000 on Thursday, its ascent to that level this year has been extremely volatile (mostly in the last month with yields climbing).
The fear of market inflation has prompted investors to sell growth stocks such as Amazon and Apple and buy value stocks.
Despite the strong work numbers, Roland assumes the value exchange will continue in the short term.
“I would expect the rotation into more cyclical or economically sensitive parts of the market to continue here. I do think that value will continue to catch a bid as the economy is turbocharged here with more fiscal stimulus and with vaccine rollouts. So that really benefits areas like financials and industrials, which are our favorite pick,” Roland says. –Yahoo