Announced this morning, the economy added 275,000 jobs in February, more than expected but the previous month was revised lower. The Leisure and Hospitality industry was relatively strong, while Temporary Help was relatively weak. The Unemployment Rate ticked two-tenths higher to 3.9%, and the Labor Force Participation Rate at 62.5% is the same as the previous month. Average Hourly Earnings increased 0.1% in February, less than expected and less than the monthly increase in the previous month. Wages grew 4.3% on an annual basis. In addition, Average Weekly Hours were 34.3, which is two tenths higher than the previous month and a rebound to previous levels.
Overall, another positive headline jobs figure in February coupled with a rise in the unemployment rate, indicating a hint of weakness may be feeding into the jobs data. Although individuals are still participating in the labor force, annual wage increases remain above the long-term average. Consumers with jobs tend to continue their spending habits. With inflation levels still above the 2% annual core rate target and a decent economic backdrop, the Federal Reserve is likely to remain patient on when to start implementing rate decreases; however, that could change should the unemployment rate continue to tick higher in future reports. With all this occurring within an election year, how well consumers maintain their spending levels will be key for the economy and markets in the coming weeks.
Following the release of the jobs report, the yield on the U.S. 10-year treasury ticks lower and equity futures are higher as we head into the market open.
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