US NFP: Labor gains support economic expansion - Wells Fargo
|According to analysts from Wells Fargo, the NFP report showed job gains in sectors that are consistent with solid consumer spending and continued economic growth.
Key Quotes:
“Nonfarm payrolls rose a solid 235,000 in February, boosting the three-month average to 209,000. Gains were strong across the private sector, with employment rising by 227,000 and an additional 8,000 jobs in the government sector. Retail was the one area of weakness–down 26,000. Manufacturing employment posted another monthly gain (up 28,000), matching the largest monthly increase since mid-2013. Construction hiring was solid at 58,000 but was likely helped by mild winter weather.”
“Outside the goods-producing industry, there has been broad-based strength in job growth over the past year, particularly in business services, education & health and leisure & hospitality. These gains are consistent with solid consumer spending and continued economic growth.”
“Average hourly earnings rose 0.2 percent in February and are up 2.8 percent year-over-year, sustaining recent gains and providing further support for a March rate hike. As illustrated in the middle chart, the pickup in wages has been modest compared to prior cycles. With economic growth and wage growth still far from a break-out pace, the Fed will likely continue to take its time tightening policy for the remainder of the year.”
“Labor force participation rates face long-run, secular headwinds that go beyond a short-run cyclical improvement drawing workers back into the labor market. There is no quick fix, but focusing on improving both the quality and quantity of the labor force will be key to driving faster, sustainable economic growth.”
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