NFP React: Investors shrug off strong payrolls and focus on War in Ukraine and inflation, Strong Payroll gain but soft wages

US stocks might be less exposed to the war in Ukraine, but the hit to global growth and inflation impact can and will eventually drag down the US economy.  Equities declined after Russia seized Europe’s largest nuclear plant. It does not seem like the Kremlin will be backing down anytime soon and that is leading to widespread selling of global equities.  In the past 24 hours, financial markets went from hoping of talks of a potential ceasefire to seeing the Russians seize a nuclear plant, which now has many investors expecting a much longer military conflict.


Wall Street will look past this impressive nonfarm payroll report. The labor market remains very tight, but what really stood out was that average hourly wages did not jump. The US economy showed hiring picked up as COVID cases declined significantly from the holiday spike.  The US added 678,000 jobs in February, which was much better than the consensus estimate of 423,000 and an improvement from the upwardly revised 481,000 reading in January.  Leisure and hospitality, professional and business services, and healthcare jobs posted strong gains, just like we saw in the ADP private payroll report.

The Unemployment Rate fell from 4.0% to 3.8% and the participation rate ticked higher.  Besides appreciating the steady hiring headline, the Fed will pay close attention to the flat wage growth from a month ago.  One report does not mean the US economy won’t continue to see rapid wage growth, but if wages stay anchored, the Fed will have a slower rate hiking path initially.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya