In February, employment dropped by 651 000, very close to the consensus estimate of 650 000. However, the January outcome was downwardly revised from -598 000 to -655 000, and the December outcome was amended from -577 000 to -681 000. All revisions taken into account, the payrolls dropped by 162 000 more than expected. Looking at the details, 276 000 were lost in goods producing sectors of which 168 000 in manufacturing, while 375 000 jobs were lost in the service providing sector. The government added 9 000 jobs. The labour force rose from 153.7 million to 154.2 million and the number of people unemployed rose from 11.6 million to 12.5 million. The unemployment rate rose from 7.6% in January to 8.1% in February, while a figure of 7.9% was expected. This is the highest unemployment rate since December 1983. Temporary help agencies, that often lead overall payrolls changes, dropped by another 78 000 (from -80 000), while education and health, non cyclical sectors, added 26 000 jobs (from 43 000). Average weekly hours worked stayed unchanged at 33.3, while the aggregate hours worked index dropped from 101.9 to 102.6. This is the fourth consecutive month that payrolls dropped by more than 500 000 which indicates that labour market conditions remain extremely fragile. We don’t expect to see a turnaround quickly as temporary help employment is still dropping sharply and also producers in the manufacturing sector became more pessimistic about labour market conditions, according to the latest ISM survey.
Other: UK input PPI rises on oil and weaker pound
In the UK, output PPI came out in line with expectations in February. On a monthly basis, output PPI rose by 0.1% M/M, while the year-on-year figure dropped from 3.5% Y/Y to 3.1% Y/Y. Core PPI, excluding food and energy, came out flat on a monthly basis. Input PPI rose by 0.6% M/M, while the yearly figure dropped from 1.5% Y/Y to 0.5% Y/Y. The stronger monthly input prices were due to the rise in crude oil prices and weaker pound.
