Labor Department Payrolls Bring a Pleasant Surprise
Can weather be to blame for poor jobs numbers for three consecutive months? After two disappointing Labor Department reports on monthly payrolls, the Bureau of Labor Statistics (BLS) has determined that the U.S. economy added in 175,000 nonfarm payrolls and 162,000 in private sector payrolls in the month of February. Stocks are cheering the news, even if it is not exactly the most robust news in the world.
Bloomberg had estimates of 150,000 in nonfarm payrolls and 165,000 in private sector payrolls. Dow Jones was calling for 152,000 in the nonfarm payrolls. One other bit of decent news was that the poor payrolls reports from January and December were actually about 25,000 better between the two months combined.
The official unemployment rate rose by 0.1% to 6.7%. Bloomberg was looking for the official unemployment rate to be static at 6.6%. Dow Jones had the number dropping marginally to just above 6.5%. The workforce grew, but so did the number of unemployed.
ADP, TrimTabs, ISM and other reports had set expectations lower for Friday's release. The news is slightly better than expected, and the revisions make the poor numbers from January and December look a tad less bad. Still, this is far from a robust growth report. GDP expectations have ratcheted down rather than up, and the weather has not been helping matters.
Key gains and losses in February were as follows:
- Professional and business services jobs grew by 79,000 jobs in February.
- Construction sector grew by 15,000 jobs in February.
- Manufacturing jobs grew by 6,000 in February.
- Retail lost 4,100 jobs.
- Leisure and hospitality jobs grew by 25,000.
- Health care added 9,500 jobs.
With stocks challenging new highs daily, the stakes were high for Friday's employment situation report. S&P 500 futures were up 1.25 points and DJIA futures were up about 13 points immediately before the report. Now that the news has been out, S&P futures are up seven points and DJIA futures are up about 60 points after 10 minutes.
Friday's Labor Department Report is a good one. Unfortunately, it is still not robust. That being said, this should have zero impact on the continued bond purchase tapering by the Federal Reserve.
Filed under: Jobs