Here are key takeaways from the February US jobs report released Friday:
- Nonfarm payrolls effectively undershot expectations. While they climbed 275,000, more than the 200,000 median estimate in Bloomberg’s survey, that was only after the previous two months of payroll gains were revised lower by 167,000.
- The unemployment rate unexpectedly climbed to 3.9%, the highest in two years, with the household survey of employment showing the fourth drop in the past five months. The unemployment rate for women jumped by 0.3 percentage point, to 3.5%, thanks to a surge of women joining the workforce. Black unemployment rose to 5.6%, from 5.3%, while the jobless rate for Whites held at 3.4%.
- Government, education, and health made up roughly half of the overall increase in payrolls, with manufacturing jobs contracting. Leisure and hospitality jobs increased by some 58,000, though that sector remains below the peak reached before Covid.
- Average hourly earnings rose less than expected, at 0.1% on the month, suggesting that the January surge in pay rates was anomalous. The average work week also lengthened, to 34.3 hours, reversing some of January’s decline. Earnings were up 4.3% from a year before.
- Treasuries climbed as the data supported the case for the Fed to lower interest rates in coming months, though next Tuesday’s important CPI inflation release may have tempered bets. Two-year Treasury yields were down 4 basis points, at 4.46%, as of 9:37 a.m. The S&P 500 opened slightly higher, up 0.2%, while the dollar declined. Interest rate futures showed a June rate cut is fully priced in.
Source: bloomberg.com
