“Today’s (jobs) data does not show a large enough divergence from expectations to shift what is expected to be the Fed’s next rate move,” said Jochen Stanzl, chief market analyst at CMC Markets.
“Still the Fed is expected to cut the Fed Funds rate twice this year and today’s data does not really give a hint into when the first cut will be,” Stanzl said.
The Fed kept its rate unchanged last week, with chair Jerome Powell saying the central bank was in no “hurry” to adjust borrowing costs again.
Total US employment rose by 143,000 jobs last month, said the Labor Department, significantly lower than the revised 307,000 figure in December.
The January figure was also below an analyst consensus estimate of 155,000 according to Briefing.com.
“We do not think that the labour market data shifts the dial for the Fed,” said Kathleen Brooks, research director at XTB trading platform.
But data released afterwards subsequently showed US consumer sentiment fell to its lowest level in July, with survey respondents reporting feeling less confident and more concerned about inflation.
Year-ahead inflation expectations rose to 4.3 per cent, up a full percentage point from a month earlier.
“Such a substantial one-month rise of one percentage point or more has occurred only five times in the past 14 years,” noted Axel Rudolph, Senior Technical Analyst at online trading platform IG.
The jump in inflation expectations follows a turbulent week for stock markets and currencies after Trump imposed tariffs on China.
The US leader also warned that the European Union would face tariffs “pretty soon” while he delayed duties on Canada and Mexico at the 11th hour.
