Strong Nonfarm Payrolls Print Lifts Wall Street, Keeps Rate Cuts Off Table

• January non-farm payrolls came in at 130K, significantly higher than the 66K estimate and the prior revised 48K.
• The unemployment rate fell to 4.3%, beating the 4.4% estimate, with labor force participation ticking higher.
• Average hourly earnings increased by 0.4% month-over-month and 3.7% year-over-year, both slightly above estimates, indicating persistent wage inflation.
• Strong job gains were seen in healthcare, construction, and social assistance, while retail remained unchanged and federal government jobs decreased.
• The robust jobs report is pushing back expectations for Fed rate cuts, with the 10-year Treasury yield ticking up as a result.
• Mortgage applications saw slight weekly declines in composite and purchase applications, but refinances were up, with the 30-year mortgage rate unchanged at 6.21%.

The January jobs report significantly beat expectations with 130,000 non-farm payrolls and a lower unemployment rate of 4.3%. This strong economic data suggests that the Federal Reserve will likely delay interest rate cuts, pushing back earlier market expectations. While positive for the economy, it implies a longer period of higher interest rates.