The Employment Situation in February – Fits Like A Glove

The Bureau of Labor Statistics (BLS) released its Employment Situation report for February. Nonfarm payrolls expanded by 235 thousand and the prior two months were revised a net 9 thousand higher. The unemployment rate edged lower to 4.7%, based on a strong gain in employed persons (447 thousand) that outpaced a strong gain in the labor force (340 thousand), from the household survey. Average hourly earnings increased 2.8% from a year ago and the labor force participation rate inched up to 63.0%, matching its highest level since falling below that mark in late 2013.

This report is tailor made to suit the Federal Reserve’s highly telegraphed intention to raise interest rates at the March 14-15 meeting of the Federal Open Market Committee (FOMC). The minutes from the last meeting, as well as speeches in recent weeks by several Fed officials, including Chairwoman Janet Yellen, suggested an increase in rates was appropriate “fairly soon” conditional on continuing positive signs from the economy. This report is the smart fit they were looking for.

 



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