The initial take is that Friday’s report provides further evidence that the U.S jobs market remains strong. There are some parts of the report that could restrain overall investor optimism. The full employment rate declined for the wrong reasons – weak household survey employment gain & a decline in the labor force. Average hourly earning edged up just +0.1% m/m, bringing the year-on-year growth rate back down from to +2% from +2.2% (however, it does remain in the “solid” trend of the last few years).
* Feb payrolls beat big: +295k vs. +235k expected – private sector strong at +288k
* Unemployment rates drops to Fed’s full-employment scenario +5.5%
* Solid numbers despite fears from weather and west coast port strike.
* Miss on wages and participation rate overshadowed
* Rates, USD up: 0.10bps hike priced for June, up from 0.08
* Long U.S rates push highs of the year. EUR co;;apses >€1.09
* The report keeps Fed on track to alter its guidance on interest rates at
March 17-18 policy meeting – potential drop of “patient”