The headline job increase of 275,000 in February was overshadowed by sharp downward revisions to the previous months’ data, a rise in unemployment and a slowing in wage growth, according to many economists.
The unemployment rate climbed to 3.9% in February, compared with 3.7% in January. Economists had predicted the rate would remain at 3.7%. Meanwhile, wage growth slowed to 4.3% annually, from 4.4%.
The market’s response, characterized by declining Treasury yields and a weakening dollar, suggests that investors anticipate the Federal Reserve will implement rate cuts sooner rather than later.
Economist reactions indicated the labor market data could support market expectations for rate cuts as jobs growth slows in the coming months.
It was noted that a significant proportion of the jobs created continued to be in the health care sector, which has averaged around 58,000 in the past 12 months and in government jobs which have averaged 53,000.
‘A Downturn Is Coming’
Ian Shepherdson, chairman and chief economist at Pantheon Macroeconomics, headlined his commentary with the austere line: “The current trend in payrolls is steady, but a clear downturn is coming.”
He pointed to recent data from the National Federation of Independent Business that showed hiring …