• NFP was much stronger than expected at 678K in February versus 400K forecasts. 
  • Measures of labour market slack were also generally strong, though wage growth metrics were much weaker than forecast.
  • The US Dollar has nonetheless been striding higher in the wake of the release. 

Nonfarm Payrolls (NFP) rose by 678K in February, well above the median economist forecast for a 400K rise, data published by the US Bureau of Labor Statistics showed on Friday. January's NFP number also saw a small upwards revision to 481K from 467K. The much larger-than-expected headline beat was driven by a 654K rise in Private Nonfarm Payrolls versus the expected 378K gain, with January's number also revised slightly higher to 448K from 444K. Manufacturing Payrolls rose 36K on the month, well above the expected 20K gain and much higher than January's 16K gain that had been revised up from 13K. 

Labour data was generally stronger than expected. The Unemployment Rate fell to 3.8% from 4.0%, more than the expected drop to 3.9%. While the U6 Underemployment Rate actually rose to 7.2% from 7.1% in January, the Participation Rate also rose to 62.3% from 62.2%, leaving it just 1.1% below February 2020 levels. 

Whilst the headline and labour market slack numbers pertaining to job creation were strong, the inflation-concerned Fed will likely be relieved at the latest wage growth metrics. Average Hourly Earnings (AHE) rose at a pace of 5.1% YoY in February, elevated but well below expectations for a rise to 5.8% from 5.5% in January, with last month's AHE reading revised lower from 5.7%. MoM, AHE came in at 0.0% versus median economist forecasts for 0.5%, a deceleration from January's 0.6% MoM reading, which had been revised lower from 0.7%. 

Market Reaction

Weak wage growth metrics have been shrugged off by the US dollar bulls, who have regained control in the wake of the much stronger-than-forecast headline NFP print, combined with decent labour market slack metrics. The Dollar Index is rising towards the 98.80s from around 97.60 prior to the data and is at session highs, with EUR/USD on the verge of collapsing below 1.0900 and GBP/USD now on under 1.3250. USD/JPY has been choppier and less reaction and stayed in the 115.30-115.45 area. 

In terms of the reaction in other asset classes, S&P 500 futures saw a kneejerk spike higher, perhaps amid an interpretation that softer wage growth metrics mean less pressure on the Fed to tighten policy as quickly this year (though this would be at odds with the FX market reaction). E-mini futures jumped into the 4430-4440 region from pre-data levels in the 4420s. Bonds were choppy and saw a two-way reaction, with the US 10-year yield swinging between post-data lows at 1.76% and highs at 1.81%, though now seem to be pushing back slightly lower again, perhaps on the soft wage growth figures. 

Spot gold (XAU/USD) isn't much moved and continues to trade in the mid-$1940s amid continued struggles when rallying towards $1950. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures