US Jobs Data Drive Fed Tapering

Schroders chief economist, Keith Wade, comments on today's US labour market data

"Despite freezing temperatures the US labour market bounced back in February. The headline non-farm payroll increased by 175,000 during the month, beating consensus expectations of a 149,000 gain. Revisions to previous months showed the economy added 25,000 more jobs than previously thought in December and January.

“The unemployment rate edged 0.1% higher to 6.7% as new entrants came into the labour market and the participation rate held at 63%. Evidence of the climatic conditions could be found in the slowdown in construction jobs and the dip in retail employment, whilst the average workweek also fell. The separate household survey showed that 601,000 people could not get to work during the month, the highest since 2010.

"We would highlight the pick up in average earnings last month, an indication that the fall in unemployment is forcing employers to bid more aggressively for workers.  Such a development, alongside the growth in employment and low inflation will bode well for the recovery by boosting household income and future consumer spending. Meanwhile, the Federal Reserve will keep tapering."

 

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