6 Mar 2015
US NFP results maintain the June Fed hike expectations – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team reviews the US labour market data release, noting that the upbeat boost in payrolls suggests that the mid-year Fed rate hike is still on the table.
Key Quotes
“Despite poor weather that appears to have effected other February data, the US jobs report is stronger than expected. The economy grew 295k net new jobs, nearly all accounted for by the private sector (+288k).”
“Some of the other details were not as impressive, but should be sufficient to boost confidence that the Federal Reserve drops the "patience" from its forward guidance later this month, keeping a June rate hike on the table.”
“The unemployment rate ticked down to 5.5% on the back of a 0.1% decline in the participation rate. Hourly earnings rose 0.1%. The consensus had called for a 0.2% increase. That pushes the year--over-year rate back to 2.0% from 2.2%.”
“Manufacturing jobs rose 8k, which is not only lower than expected, but the smallest monthly increase since July 2013. Revisions reduced the job growth of the past two months by 18k.”
“In addition to the headline strength, the other impressive part of the report, especially for the Federal Reserve, is the U-6 measure of underemployment. It fell to 11% from 11.3%. It stood at 12.6% last February.”
Key Quotes
“Despite poor weather that appears to have effected other February data, the US jobs report is stronger than expected. The economy grew 295k net new jobs, nearly all accounted for by the private sector (+288k).”
“Some of the other details were not as impressive, but should be sufficient to boost confidence that the Federal Reserve drops the "patience" from its forward guidance later this month, keeping a June rate hike on the table.”
“The unemployment rate ticked down to 5.5% on the back of a 0.1% decline in the participation rate. Hourly earnings rose 0.1%. The consensus had called for a 0.2% increase. That pushes the year--over-year rate back to 2.0% from 2.2%.”
“Manufacturing jobs rose 8k, which is not only lower than expected, but the smallest monthly increase since July 2013. Revisions reduced the job growth of the past two months by 18k.”
“In addition to the headline strength, the other impressive part of the report, especially for the Federal Reserve, is the U-6 measure of underemployment. It fell to 11% from 11.3%. It stood at 12.6% last February.”