Treasury prices are slightly higher following the release of the February jobs report, which showed mixed results on payrolls, wages, and unemployment. Stocks were already in the red prior to the report on negative headlines related to weaker economic data from China and Germany, as well as the rally in the U.S. dollar following yesterday’s ECB decision. S&P 500 futures are currently down 0.75% ahead of the open.

Nonfarm payrolls added only 20,000 jobs in February (185,000 expected), the lowest monthly growth figure since September 2017. On a positive note, wage growth exceeded expectations at 0.4% m/m and 3.4% y/y. The year-over-year rate was the highest of the current expansion and was up 30 bps from the prior month. The household survey data was also better than expected, likely reflecting the return of government workers following the shutdown (different calculation methodology than the establishment survey that produces nonfarm payrolls data). The headline unemployment rate fell 20 bps to 3.8%, driven by a 255,000 increase in household employment and slight decline in the official labor force. The U-6 underemployment rate, which includes those marginally attached to the workforce and those working part-time for economic reasons, plunged 80 bps to 7.3%, the lowest since March 2001. While the data within the February report was mixed, the headline payrolls data helps more dovish Fed leaders support their case to hold still from a policy perspective until it becomes more clear of the data trajectory.

Jason Haley
Managing Director, Investment Management Group
Date TimeEventSurveyActualPriorRevised
3/4/2019Conference Board Revises January LEI Report
3/4/2019Construction Spending MoM0.10%-0.60%0.80%
3/5/2019Markit US Services PMI56.25656.2
3/5/2019Markit US Composite PMI55.555.8
3/5/2019ISM Non-Manufacturing Index57.459.756.7
3/5/2019New Home Sales600k621k657k599k
3/5/2019New Home Sales MoM-8.70%3.70%16.90%9.10%
3/5/2019Monthly Budget Statement$10.0b$8.7b$49.2b
3/6/2019MBA Mortgage Applications-2.50%5.30%
3/6/2019ADP Employment Change190k183k213k300k
3/6/2019Trade Balance-$57.9b-$59.8b-$49.3b-$50.3b
3/6/2019U.S. Federal Reserve Releases Beige Book
3/7/2019Challenger Job Cuts YoY117.20%18.70%
3/7/2019Initial Jobless Claims225k223k225k226k
3/7/2019Continuing Claims1772k1755k1805k
3/7/2019Nonfarm Productivity1.50%1.90%2.30%1.80%
3/7/2019Unit Labor Costs1.70%2.00%0.90%1.60%
3/7/2019Bloomberg Consumer Comfort62.161
3/7/2019Household Change in Net Worth-$3730b$2070b$1833b
3/7/2019Consumer Credit$17.000b$17.049b$16.554b$15.363b
3/8/2019Housing Starts1195k1230k1078k1037k
3/8/2019Housing Starts MoM10.90%18.60%-11.20%-14.00%
3/8/2019Building Permits1287k1345k1326k
3/8/2019Building Permits MoM-2.90%1.40%0.30%
3/8/2019Change in Nonfarm Payrolls180k20k304k311k
3/8/2019Two-Month Payroll Net Revision12k
3/8/2019Change in Private Payrolls170k25k296k308k
3/8/2019Change in Manufact. Payrolls12k4k13k21k
3/8/2019Unemployment Rate3.90%3.80%4.00%
3/8/2019Average Hourly Earnings MoM0.30%0.40%0.10%
3/8/2019Average Hourly Earnings YoY3.30%3.40%3.20%3.10%
3/8/2019Average Weekly Hours All Employees34.534.434.5
3/8/2019Labor Force Participation Rate63.20%63.20%63.20%
3/8/2019Underemployment Rate7.30%8.10%