Jobs Report Blows Through Expectations, But Market Likely To View Numbers As Stale

It’s safe to say the February jobs report will be described as some semblance of “stale” give how dramatically the coronavirus situation has escalated over the past two weeks.

The Fed’s decision calculus has clearly changed – COVID-19 prompted a “material reassessment” earlier this week, manifested in the first emergency rate cut since the crisis.

Policymakers and market participants will be laser-focused on forward-looking indicators and anything that gives the market a real-time gauge of economic activity, which is expected to slow amid proliferating containment efforts aimed at slowing the spread of the virus.

January’s jobs report was an ostensible blockbuster, but it was marred by revisions.

In February, the US economy added 273k jobs, making a mockery of consensus, which was looking for 175k. That’s well above even the most optimistic estimate. The range was 132k to 249k.

Net revisions added 85k to the prior two months, taking December’s gain to 184k and January’s already high headline to 273k. That means the three-month average is now 243k/month.

Private payrolls rose 228k, also above the highest estimate from nearly three-dozen economists. The unemployment rate ticked lower to 3.5%, and remains at a five-decade nadir.

Average hourly earnings rose 0.3% MoM. That matched estimates. YoY, wages grew 3%, in line and below last month’s 3.1% pace.

Manufacturing payrolls rose 15k, after falling 20k in January.

These are, at least on a first read, pretty good numbers. Again, it probably won’t matter right now, because the report will be seen as hopelessly stale, and the market will continue to anticipate a material deescalation in hiring as the coronavirus case total moves higher, which it invariably will.

Oh, and just as a fun reminder, recall that the annual revisions reported last month trimmed 2018’s jobs gain to 2.31 million, down from 2.68 million. Gains in Trump’s other two years in office (i.e., 2017 and 2019) were around 2.1 million. In other words, each year under Trump has been marginally lower than the 2.35 million rise in the final year of Obama’s second term. So, Trump really needs this year to be strong.

Estimates and priors

  • Change in Nonfarm Payrolls, est. 175,000, prior 225,000
  • Average Hourly Earnings YoY, est. 3.0%, prior 3.1%
  • Change in Private Payrolls, est. 160,000, prior 206,000
  • Change in Manufact. Payrolls, est. -3,000, prior -12,000
  • Unemployment Rate, est. 3.6%, prior 3.6%
  • Average Hourly Earnings MoM, est. 0.3%, prior 0.2%
  • Average Weekly Hours All Employees, est. 34.3, prior 34.3
  • Labor Force Participation Rate, est. 63.4%, prior 63.4%
  • Underemployment Rate, prior 6.9%


  • U.S. Feb. Nonfarm Payrolls Rose 273k; Unemp. Rate at 3.5%
  • Nonfarm payrolls, net revisions, 85k from prior two months
  • Participation rate 63.4% vs prior 63.4%
  • Avg. hourly earnings 0.3% m/m, est. 0.3%, prior 0.2%
    • Y/y 3.0%, prior 3.1%; est. 3.0%
  • Nonfarm private payrolls rose 228k vs prior 222k; est. 160k, range 100k-225k from 33 economists surveyed
  • Manufacturing payrolls rose 15k after falling 20k in the prior month; economists estimated -3k, range -8k to 22k from 19 economists surveyed
  • Unemployment rate 3.5% vs prior 3.6%; est. 3.6%, range 3.4%-3.7% from 80 economists surveyed
  • Underemployment rate 7% vs prior 6.9%
  • Change in household employment 45k vs prior -89k


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2 thoughts on “Jobs Report Blows Through Expectations, But Market Likely To View Numbers As Stale

  1. Objectively, as the economy moves towards 100% employment, it becomes more and more difficult to annually add 2+ million jobs.
    With a few tweaks, there is a reasonable chance that the economy will return to strength when we come out of the C-virus tunnel. Especially, if US actually brings a “baseline” of critical manufacturing back to US.

    1. I’m trying to understand how that bringing-manufacturing-back-to-the-U.S. idea works. Most mass industry shops in this country are unionized, which means you’re paying entry-level employees $20 — and even if they’re not unionized, you’re paying $14/$15 (starting wages — pathetic, I know). Compared to $4 or $5 in Mexico or Pakistan or China. Those jobs aren’t coming back to the U.S. or Canada. They may go to Vietnam or Cambodia or Brazil but, barring a collapse of the global economy, they’re not coming back here. American consumers will not — and cannot afford to — pay 2x, 3x, 4x for their cars and electronics and clothes. It’s hollow rhetoric designed to disguise the real agenda: global American hegemony today, tomorrow, for rest of the 21st century.

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