On balance a very good employment report for the month of February that saw an increase in nonfarm payrolls of 242,000 that easily beat the consensus estimate of 190,000. In addition the December and January numbers were revised upwards for a total of 30,000 jobs.
A number sure to stir some discussion however was the drop in average hourly earnings of 0.1% from $25.38 to $25.35. To be fair last month the hourly wage increased by 12 cents an hour, a gain attributed to an increase in certain minimum wage laws; but as ZeroHedge points out: with a corresponding drop in hours worked the weekly average earnings dropped by the greatest amount on record, which goes back ten years to March of 2006.
As for Central Banking implications, the consensus is that there is no chance for a rate hike in March, while Rueters reports that markets “see a roughly 50 percent chance of a hike at the September and November meetings, according to CME FedWatch.”
Personally, I would not be surprised to see Janet Yellen take another few steps out on the partially frozen lake sooner rather than later.
Markets appeared to have weathered the beginning of the year storm, or at least come up for air. The FOMC in its quest for a return to normalcy may see a window that is cracked open enough for another measly rate hike of 25 basis points. While I wouldn’t go as far as to predict a March hike, whether or not the cracked window will be open through September is a chance the FOMC may not want to take.
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