Futures are down quite significantly although markets are of course not open today. The NFP number is surprising in light of weekly claims which are at 4 year lows and would indicate a number of 200Kish in terms of job growth. But with prices this high in equities economic data cannot disappoint, and this is a disappointment versus expectation. It will bring into question whether some of the strength the past few months has been based on the unseasonably warm weather.
From this seat there is way too much focus on a number that is revised multiple times and can be off by 50-100K+ once all it is said and done, but that's the construct of the modern market. The unemployment rate fell by 0.1% but again that is due to the participation rate falling – which after a 1 month respite, once more dropped.
Under the numbers, a big drop in retail which one would think is the end of temporary holiday hiring. Average hourly earnings added 0.2% but weekly hours worked fell 0.1 to 34.5 hrs. The service sector, which dominates the economy, was the big loser. Manufacturing was positive, with the auto sector continuing its rebound.
U-6 (broader unemployment including those marginally attached to the workforce i.e. part time workers who want full time work) dropped from 14.9% to 14.5%.
Participation rate dropped from 63.9% to 63.8%.
The "good news"? My call for new QE coming in June is strengthened.
- Employers added 120,000 jobs last month, the Labor Department said on Friday, the smallest increase since October. Economists polled by Reuters had expected nonfarm employment to increase 203,000 and the jobless rate to hold at 8.3 percent.
- "This is going to keep the Fed in easy policy mode. They're going to want to see a step toward 300,000 before they start to think about seeing a stronger outlook for the economy," said Sean Incremona, an economist at 4CAST in New York.
- While the unemployment rate fell to its lowest level since January 2009, that was mainly because some people gave up the search for work. The separate household survey, from which the jobless rate is derived also showed a drop in employment.
- The weakness in hiring last month was concentrated in the vast private services sector, which added only 90,000 after increasing payrolls by 204,000 in February. Retail employment fell dropped 33,800 after falling 28,600 the prior month.
- Construction hiring fell 7,000, the second straight monthly decline. Temporary help fell 7,500 after rising 54,900 in February.
- However, manufacturing enjoyed another month of strong job gains, with factories adding 37,000 new positions, helped by carmakers trying to meet pent-up demand for motor vehicles. Factory jobs increased by 31,000 in February.
- Government employment edged down 1,000 after rising 7,000 in February.
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