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Alvin Liew at UOB Group assessed the recently published US monthly labour market report.

Key Quotes

“US employment creation added another fantastic month, as the US economy created 273,000 jobs in February… Even more impressive was the significant 85,000 upward revision to the jobs data of the preceding two months as January’s job print was revised higher to 273,000 (from 225,000) while the increase for December was also raised to 184,000 (from 147,000).”

“US unemployment rate edged lower to 3.5% in February (from 3.6% in January) in line with the strong jobs print while labor participation rate stayed steady at 63.4%, matching the highest participation rate since June 2013. US wage growth came in right at market expectations, rising by 0.3% m/m, 3.0% y/y from 0.2% m/m, 3.1% y/y in January. US wage gains has been at or above 3% on a y/y basis since July 2018.”

“As 2020 progresses, the strong start in January and February may not sustain. We had earlier highlighted the risks of a prolonged growth cycle and expectations of slower US economic outlook which may slow the US jobs creation but we still expect positive job increase overall. But with the arrival and the rapid spread of the coronavirus (COVID-19) in the US, some sectors will be directly impacted, resulting in reduced hiring or even job losses.”

We now expect the US to record its monthly net job losses soon, the first since October 2010, if not in March, then most likely in April.”