- Job growth of 275,000 in February beat economist forecasts, but prior months were revised down by 167,000.
- Wage growth moderated in February, rising just 0.1% versus estimates of 0.3%, signalling potentially slowing inflation.
- While major tech companies recently announced layoffs, the labor market overall remains tight with job openings significantly outnumbering unemployed workers.
The latest jobs report shows the U.S. economy added 275,000 jobs in February, beating economist expectations. However, other data points to slowing growth.
February Job Growth Tops Forecasts
- Nonfarm payrolls increased by 275,000 in February.
- The unemployment rate ticked up to 3.9% from 3.7% in January.
- Economists surveyed by Dow Jones had forecast 198,000 new jobs and 3.7% unemployment.
Downward Revisions Temper Gains
- December and January job growth was revised down by a total of 167,000.
- December was revised down to 290,000 from 333,000.
- January was revised down to 229,000 from 353,000.
Wage Growth Moderates
- Average hourly earnings rose 0.1% in February, below the 0.3% estimate.
- On a yearly basis, wages were up 4.3%, down from 4.5% in January.
Takeaway for the Fed
- The report likely keeps the Fed on track to cut rates this year, though timing is uncertain.
- Markets are now pricing in a rate cut with greater certainty in June.
- But mixed signals on growth and inflation give the Fed flexibility.
Job Growth Continues Despite Tech Layoffs
- Major tech companies like Cisco, Microsoft and SAP announced layoffs recently.
- However, the labor market remains tight overall.
- Job openings still outnumber unemployed workers significantly.
Conclusion
- The February jobs report contained positives like job growth beating forecasts.
- But downward revisions and moderating wage growth add uncertainty.
- The data keeps Fed policy flexible in coming months.
