U.S. economy creates 236,000 new jobs; dollar rises
Some sectors of economy weakening in terms of jobs data
U.S. rate futures price in 25bp hike in May

NEW YORK, April 7 Reuters The dollar strengthened on Friday after data showed an increase in jobs in the world39;s largest economy last month, suggesting that the Federal Reserve may have to raise interest rates next month.

Prior to the jobs report, the rate futures market had been betting that the Fed would pause at the May policy meeting. The market has now priced in a 70 chance the Fed will raise interest rates by 25 basis points bps, though multiple rate cuts have also been factored in by the end of the year.

Friday39;s data showed U.S. nonfarm payrolls increased 236,000 in March, in line with forecasts of 239,000. Data for February was revised higher to show 326,000 jobs were added instead of 311,000 as previously reported.

The unemployment rate fell to 3.5 from 3.6 in February. Average hourly earnings, which reflect wage inflation, rose 0.3 in March after gaining 0.2 in February.

Federal Reserve officials are likely to continue delivering their higherforlonger message in the runup to the May policy meeting, supporting expectations for a final rate hike and putting a floor under the dollar, said Karl Schamotta, chief market strategist at Corpay in Toronto.

That said, recent data would suggest that the economic risk backdrop is turning more negative if inflation and retail sales numbers disappoint in coming…