Markets

Jobs Report Was No Fairy Tale

Jobs Report Was No Fairy Tale

A bumper jobs report sent United States stock markets up and eased investors' fears that rising wages would force the Federal Reserve to raise interest rates higher than hoped.

The report nearly always comes out on the first Friday of the month, but not this month: The February 2018 report is scheduled to be released on March 9, a week later than might be expected. Their jobless rate fell to 6.8 percent, the lowest level since 2000.

The 313,000 jobs that the nation added in February are far more than are needed to keep up with population growth and continue a surprising burst of job creation to start the year.

Average hourly earnings rose by 4 cents, following a 7 cent gain in January.

Annually the report said that wages increased 2.6%. The plan has also resulted in consumers having more after-tax income in their paychecks.

Paul Ashworth, chief USA economist at Capital Economists said that he is not paying much attention to wage data.

"That's the way the Fed is likely to see it too".

I expect workers to report a 6-cent hourly raise in February, a little off of last month's pace. New York Federal Reserve president William Dudley said that four rate increases would still constitute a "gradual" tightening. Employment growth was especially strong in the goods producing sector, where 254,000 jobs were added in the past three months, more than in any other three-month period since 1984. (The labor force participation rate in February was 63 percent, a 0.3 percent jump from the previous month). But there are still plenty of working age adults out of the labor force.

Tillerson departs for Africa for talks with Buhari, others
Another top concern is African nations' growing indebtedness to Beijing, which is building infrastructure across the continent. Tillerson said China used corruption and predatory loan practices to undermine African governments and mire them in debt.


The Bureau of Labor Statistics said 313,000 jobs were created in February.

Following the the report, stock futures were higher with Dow futures up 150 points, or 0.6%, while S&P 500 futures were up 0.5% and Nasdaq futures were higher by 0.6%.

The two rates are faster than the overall job growth rates seen since the last recession, bouncing around 1.0% to 2.0%.

Though the unemployment rate is low, broader measures of unemployment are still elevated, suggesting there is still slack in the labor market that firms can draw from to increase worker output without very aggressively bidding up wages.

The number of people that have given up looking for jobs, so-called discouraged workers, declined 149,000 from the same month past year. Construction businesses added 61,000 jobs, while factories boosted payrolls by 31,000. Hiring also picked up at retailers, manufacturers and local governments, including schools. The economy added 175,000 jobs in December and 239,000 in January.

The pace of hiring has picked up recently.

This is less than the industry's average monthly gain of 24,000 in 2017, according to the BLS. There is still room to run in this labor market recovery.


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