Maybe our training and practicing in throwing darts is paying off as our NFP guesstimate was a bit more accurate than the Street's. Change in NFP during Feb. came in at 175K, higher than our 165K estimate and the Street's 150K. It appears that the 'weather factor' cannot be used here because 1) the number came in better than the deliberate lowballing-Street's estimates, and 2) according to BLS, the weather does not impact the survey results when we are talking about NFP and the unemployment rate.
The economy continued to experience slow job growth. In addition, wages are growing at a higher pace than the latest CPI. Combined with disappointment in consumer spending, these could mean one of two things: either consumers begin spending a bit more, given the wage growth; or companies will slow down their hiring due to rising costs brought on by higher wages and not accompanied by enough increase in consumption.
Given the equity market's 4.5% increase the last month and 2.5% YTD, the market was looking for either a big miss or a much more significant surprise to the upside in order to react in a big way. S&P 500 has barely changed today.
The 175K increase in NFP was helped by 13K more state and local government jobs.
The official unemployment rate increased to 6.7% from 6.6%, which we think was driven partially by the 264K increase in the civilian labor force count. Participation rate remained at 63%. Lastly, the U-6 unemployment rate, which we follow more closely than the 'official' one, declined to 12.6% from 12.7%.
The economy continued to experience slow job growth. In addition, wages are growing at a higher pace than the latest CPI. Combined with disappointment in consumer spending, these could mean one of two things: either consumers begin spending a bit more, given the wage growth; or companies will slow down their hiring due to rising costs brought on by higher wages and not accompanied by enough increase in consumption.
Given the equity market's 4.5% increase the last month and 2.5% YTD, the market was looking for either a big miss or a much more significant surprise to the upside in order to react in a big way. S&P 500 has barely changed today.
The 175K increase in NFP was helped by 13K more state and local government jobs.
- In terms of industries, construction added 15K jobs led by heavy and civil engineering construction jobs. Jobs in residential building construction increased while non-residential building jobs declined.
- Manufacturing industry added only 6K (all in durable goods), which was not surprising given the ISM manufacturing numbers for the month.
- Wholesale trade jobs increased by 14.8K, led by jobs related to durable goods. Retail trade jobs declined a bit. Electronic and appliance stores, along with general merchandise stores, shed a combined 17.4K jobs, partially offset by 12K jobs added in food and beverage stores.
- Surprisingly (in our opinion), motion picture and sound recording industry jobs declined 14.1K. In 2013, those jobs increased by nearly 20K from Jan. to Feb. Broadcasting jobs, mostly TV and excluding the Internet, increased slightly.
- In finance, there was an increase of 9K, led by jobs in insurance and related activities, and rental and leasing services. Disappointments came in the commercial banking and real estate areas. Let's hope this is not due to an expectation of a slowdown in mortgage lending, and auto and business loans going forward.
- Professional and business services added 79K jobs, led by accounting and bookkeeping (it is tax season), and employment services jobs. Temporary help services jobs have gone up by more than 200K since Feb. '13.
- As usual, there were more jobs in education and health services, 33K more than in Jan.
- A 21.2K uptick in restaurant jobs helped push jobs in leisure and hospitality up by 25K from last month. This goes along with increase seen in wholesale food and beverage related jobs.
- Average weekly hours worked declined to 34.2 from 34.3, likely due to the 'weather factor'. BLS has explained that this measure is probably the only one that is impacted by unusual weather. And average hourly earnings went up by 2.2% the last 12 months to $24.31.
The official unemployment rate increased to 6.7% from 6.6%, which we think was driven partially by the 264K increase in the civilian labor force count. Participation rate remained at 63%. Lastly, the U-6 unemployment rate, which we follow more closely than the 'official' one, declined to 12.6% from 12.7%.
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