What's going on?

The US can�t stop teasing investors with the prospect of an economic boom: data out on Friday showed the US economy added 379,000 jobs in February � almost double the 200,000 economists were predicting (tweet this).

What does this mean?

The unemployment rate dropped from 6.3% in January to 6.2% last month, and unlike previous months, the �participation rate� � the proportion of people who are either working or seeking employment � didn�t drop. In other words, there were more people who joined the workforce than there were people who gave up looking for work altogether.

One number economists are paying extra-close attention to is �average hourly earnings�, which was only marginally higher in February than it was in January. That suggests there�s still room for plenty of jobs to be added before businesses have to start hiking wages to tempt in new applicants. Makes sense: the US is still some 9.5 million jobs short of where it was before the pandemic landed.

Why should I care?

For markets: The US is on stronger footing.

Employment reports give an almost real-time insight into how the economy is doing, and last week�s update bodes well. Now that hiring seems to be back on track, there�ll be more people working � and therefore able to spend � when a vaccinated America fully reopens for business. That should be good for economically sensitive cyclical stocks in particular, some of which rose on Friday.

The bigger picture: Just the idea of higher rates is enough to knock stocks.

An influx of newly employed workers with a bit more cash to burn seems to have investors worried that inflation is set to climb. And while the US Federal Reserve has said interest rates won�t change for a while yet, the prospect they will was enough to push investors to sell off their stocks on Friday.