Nonfarm payrolls added 236,000 jobs in February, essentially in line with expectations, and the headline unemployment rate ticked down to 3.5%. The latter was attributable to a 577,000 increase in household employment, which outpaced a 480,000 increase in the labor pool. Growth in average hourly earnings was also close to expectations at 0.3% m/m and 4.2% y/y, but the average workweek fell from 34.5 hours to 34.4 hours. While the pace of wage growth appears to be cooling from its peak, it still likely remains above the Fed’s comfort zone, and today’s report is more supportive of another 25 basis point hike in May. Front-end Treasury yields are up 7-10 basis points following the release of the report in what should be a quiet trading day with the early close at 12pm ET.
Jason Haley
Chief Investment Officer
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