Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Nonfarm payrolls increased by 151K in February, which was slightly below their recent trend and consensus expectations. Revisions to prior months’ data were minimal on net. Federal government employment declined by 10K in an early sign of what is to come amid the new administration’s efforts to reduce the federal workforce. That said, state and local government employment more than offset this decline, and private sector hiring broadened out in February. The data from the household survey were more lackluster. The unemployment rate rose by one-tenth of a percentage point to 4.1%, while the broader U-6 “under-employment” rate rose by 0.5 percentage point amid a spike in those working part-time but who would like to work full-time.
Chair Powell faces a difficult task at the upcoming FOMC meeting to be held on March 18–19. Optimism about a labor market acceleration has faded amid cooler economic data, deteriorating sentiment and the rising probability of a major trade war.