The latest Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) is out this morning, with nonfarm payrolls having reached 431K on the headline. The Unemployment Rate fell to a post-Covid low 3.6%, down 20 basis points month over month. Pre-market futures sold off a tad on the news.
That 431K headline figure is actually a miss from expectations of 490K, but with revisions to the two previous months — February’s headline rose from 678K originally reported to an extraordinary 750K today, while January gained +23K positions to 504K — we’re still very consistent with a robust labor force. In short, our trailing three-month average in nonfarm payroll job gains is over half a million per. Not too shabby.
Perhaps even more important is the +0.4% month-over-month gain in Average Hourly Earnings. This followed a slightly upwardly revised +0.1% a month ago, and reignites the narrative that higher wages — a stickier aspect of inflation, by the way, than short-term commodity prices — continue. Year over year, Average Hourly Earnings are at a cycle high +5.6%.
However, as in prior months these wage gains were primarily among lower-wage earners, these newer numbers suggest raises are also making their way up the workforce food chain. There is also the nagging the matter that this wage growth is still not keeping up with inflation at this stage. So, nice as these headline figures are, the labor market still has more “work” to do.
Labor Force Participation reached 62.4%, exactly one percentage point below the pre-Covid high 63.4% and up for the third month in a row. While historically fuller than we’ve seen for some time, the reality is that less than two-thirds of work-age Americans remain employed. The U-6 column — aka “real unemployment” — did notch a post-Covid low this morning, at 6.9%. We currently see 164.4 million Americans in the workforce, which is also back to pre-Covid lows.
As per usual, job gains were led by the Leisure & Hospitality sector at 112K, followed by Professional & Business Services at 102K. Manufacturing continues to come back relatively well, +38K for the month, in-line with the previous month. We’re seeing job gains across the board, which is overall a net positive for the economy.
Yet pre-market indexes have shrunk as the market digests this news: the Dow had been +200 points and is currently riding around +140, the Nasdaq had been +110 points and is now down to +50 and the S&P 500 is +15 points after being over 20 earlier this morning. Part of this may have to do with the April Fool’s Day prank bond yields are playing on us this morning: 2-years and 10-years are toying with inverting all morning so far.
Later today, we’ll see results from PMI and ISM Manufacturing for March, Construction spending for February, and various Motor Vehicle Sales reported throughout the day. More grist for the mill as calendar Q2 gets underway.
Image: Bigstock
Less-Than-Expected Jobs Addition in February
The latest Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) is out this morning, with nonfarm payrolls having reached 431K on the headline. The Unemployment Rate fell to a post-Covid low 3.6%, down 20 basis points month over month. Pre-market futures sold off a tad on the news.
That 431K headline figure is actually a miss from expectations of 490K, but with revisions to the two previous months — February’s headline rose from 678K originally reported to an extraordinary 750K today, while January gained +23K positions to 504K — we’re still very consistent with a robust labor force. In short, our trailing three-month average in nonfarm payroll job gains is over half a million per. Not too shabby.
Perhaps even more important is the +0.4% month-over-month gain in Average Hourly Earnings. This followed a slightly upwardly revised +0.1% a month ago, and reignites the narrative that higher wages — a stickier aspect of inflation, by the way, than short-term commodity prices — continue. Year over year, Average Hourly Earnings are at a cycle high +5.6%.
However, as in prior months these wage gains were primarily among lower-wage earners, these newer numbers suggest raises are also making their way up the workforce food chain. There is also the nagging the matter that this wage growth is still not keeping up with inflation at this stage. So, nice as these headline figures are, the labor market still has more “work” to do.
Labor Force Participation reached 62.4%, exactly one percentage point below the pre-Covid high 63.4% and up for the third month in a row. While historically fuller than we’ve seen for some time, the reality is that less than two-thirds of work-age Americans remain employed. The U-6 column — aka “real unemployment” — did notch a post-Covid low this morning, at 6.9%. We currently see 164.4 million Americans in the workforce, which is also back to pre-Covid lows.
As per usual, job gains were led by the Leisure & Hospitality sector at 112K, followed by Professional & Business Services at 102K. Manufacturing continues to come back relatively well, +38K for the month, in-line with the previous month. We’re seeing job gains across the board, which is overall a net positive for the economy.
Yet pre-market indexes have shrunk as the market digests this news: the Dow had been +200 points and is currently riding around +140, the Nasdaq had been +110 points and is now down to +50 and the S&P 500 is +15 points after being over 20 earlier this morning. Part of this may have to do with the April Fool’s Day prank bond yields are playing on us this morning: 2-years and 10-years are toying with inverting all morning so far.
Later today, we’ll see results from PMI and ISM Manufacturing for March, Construction spending for February, and various Motor Vehicle Sales reported throughout the day. More grist for the mill as calendar Q2 gets underway.