7 Mar 2016
US Nonfarm payrolls proved to be a big surprise to the upside- Deutsche Bank
Research Team at Deutsche Bank, suggests that Friday’s employment report, February nonfarm payrolls proved to be a big surprise to the upside with a robust and consensus beating +242k (vs. +195k expected) of job gains including 30k of upward revisions to prior months.
Key Quotes
“In fact the number was higher than 91 of the 92 Bloomberg economist forecasts with retail and healthcare sectors leading the charge and defying that weaker ISM services employment print which had people nervous. The other good news was the U-3 unemployment rate holding steady at 4.9% as expected, the broader U-6 measure edging down two-tenths to 9.7% and the lowest since May 2008, while the labour force participation rate ticked up two-tenths to 62.9% (vs. 62.8% expected) and the highest since July 2014.
It wasn’t all good news however. Notably, average hourly earnings unexpectedly declined last month by -0.1% mom (vs. +0.2% expected) which had the effect of dragging down the YoY rate by three-tenths to 2.2%. As well as this, average weekly hours worked fell from 34.6 hours to 34.4 hours. While some of the chatter blamed the softer earnings data in particular on the timing of the survey, much of the debate switched towards the slowdown in hours rather than employment being an obvious response to weak productivity.”
Key Quotes
“In fact the number was higher than 91 of the 92 Bloomberg economist forecasts with retail and healthcare sectors leading the charge and defying that weaker ISM services employment print which had people nervous. The other good news was the U-3 unemployment rate holding steady at 4.9% as expected, the broader U-6 measure edging down two-tenths to 9.7% and the lowest since May 2008, while the labour force participation rate ticked up two-tenths to 62.9% (vs. 62.8% expected) and the highest since July 2014.
It wasn’t all good news however. Notably, average hourly earnings unexpectedly declined last month by -0.1% mom (vs. +0.2% expected) which had the effect of dragging down the YoY rate by three-tenths to 2.2%. As well as this, average weekly hours worked fell from 34.6 hours to 34.4 hours. While some of the chatter blamed the softer earnings data in particular on the timing of the survey, much of the debate switched towards the slowdown in hours rather than employment being an obvious response to weak productivity.”