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Senior Economist at UOB Group Alvin Liew assesses the February’s Nonfarm Payroll (Friday).

Key Quotes

“The US jobs market was surprisingly strong in Feb as the US nonfarm payrolls (NFP) rose by 379,000 (NFP) jobs, well above the Bloomberg median estimate of 198,000 jobs. Notably, the number of jobs gained in January was also revised significantly higher to 166,000 (from the previous estimate of just 49,000). The latest private NFP number (465,000) was also much better than the private sector ADP print of 117,000 jobs increase reported during mid-week (3 Mar).”

“In tandem with the robust jobs rebound, the unemployment rate eased further to 6.2% in Feb (from 6.3% in Jan) while the participation rate stayed steady at 61.4% (unchanged from Jan).”

“With the healthy jobs uptick in Feb and the material upward revision for Jan, the outlook for US employment situation looks brighter although we are cognizant that the US employment level is still 8.5 million below of that in Feb 2020, while the participation rate is also nearly 2 percentage points below in this same period of comparison.”

“The factors underpinning the positive US jobs outlook will be the acceleration of the vaccine rollout and the recent approval of a new single-dose regime inoculation, and more fiscal stimulus to cushion the COVID-19 impact for businesses and households in the form of President Biden’s US$1.9 trillion coronavirus relief bill”¦ We now expect US unemployment rate to ease further through the year, to 5.3% by end-2021 (versus previous estimate of 6.0%).”