U.S. Outlook: Blowout job creation, but wages fail to launch
If you merely glanced at the February jobs gain (313K), you would be forgiven for concluding the U.S. labor market is on fire and the economy is in danger of overheating and burning to the ground.
February’s jobs gain is more than three times the pace the Fed believes is necessary on a monthly basis to keep the unemployment rate steady.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on March 9.Key observations:
- This was the strongest monthly gain in nonfarm payrolls since July 2016.
- Despite sizzling job growth in recent months, signs of an overheating labor market were just not there.
- Average hourly earnings increased only 0.1% in February, and the year-on-year gain slipped to 2.6% from a downwardly revised 2.8% gain in January.
- The February jobs report makes another Fed funds rate hike in March a near certainty, in my opinion.