Unemployment in the US remained steady at 4.9% as the US created another 242k jobs in February. The number of jobs was more than the market expected (195k) and the unemployment rate was stable despite a rise in the participation rate from 62.7% to 62.9%, which implies the US economy is creating enough jobs to absorb new entrants into the work force. On top of the strong figures for February, the previous two months were revised up 30k.
US interest rates rose on the news. 2 year bond yields rose 2bps to 0.86% and 10 year bond yields finished the day at 1.87%, up 4.5bps.
Westpac and Goldman Sachs both described the report as “strong” but each pointed to the weaknesses in some of the data within it. Hourly earnings fell in the month to be 2.2% higher than the same time last year.
Westpac pointed to the “soft earnings, a fall in hours worked, and a skew toward health and education jobs” while Goldman Sachs said the release contained “mixed details…[which] served to keep the idea of Fed tightening in play without mandating a hike at the bank’s March 15-16 meeting.”