The US gained no less than 313,000 jobs in February but wages significantly slowed down to 2.6% and the monthly increase was 0.1%. What does this mean moving forward? Here is the view from CIBC.
Here is their view, courtesy of eFXnews:
CIBC Research discusses its reaction to today’s NFP data for the month of February.
February data confirmed our suspicion that last month’s strong wage figure was largely an illusion, with a tame 0.1% gain in the latest month taking the annual rate back close to the average of the past couple of years (2.6% vs consensus of 2.8%). That softer wage figure came despite signs of very strong job growth during the month. Payrolls jumped by 313K, with a cumulative upward revision of 54K to the prior two months on top of that.
While the unemployment rate failed to tick back down as expected, remaining at 4.1%, that was due to a healthy rise in labour force participation. With average hours also rising alongside the strong employment print, today’s figures confirm that the US economy continues to grow strongly.
However, the wage numbers should allay fears of a quick pick up in inflation, and as such we still see the Fed hiking interest rates three times this year ie. the same pace as that seen in 2017,” CIBC argues.
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