: ‘Omicron is in the past’ — economists react to February jobs report

The February nonfarm payrolls report on Friday showed the U.S. economy added 678,000 jobs last month, with the unemployment rate falling to 3.8% from 4%.

Economists polled by The Wall Street Journal had expected a gain of 440,000 jobs and an unemployment rate of 3.9%. 

See: U.S. gains 678,000 jobs in February and unemployment drops to 3.8%

Below are some initial reactions from economists and other analysts, as the main U.S. stock gauges


looked set for declines after the better-than-expected figures for nonfarm payrolls, as investors focused on the worsening conflict between Russia and Ukraine.

• “The one big surprise in this report was average hourly earnings, which were unchanged in February, with the annual rate dropping to 5.1% from 5.7%. With the composition of payroll gains broad-based, most of that deceleration appears to reflect a genuine easing of pay pressures. While that might seem at odds with the falling unemployment rate, the job openings and quits rates and broader survey evidence have suggested labour shortages are levelling off a bit, which is consistent with pay growth stabilising.” —Michael Pearce, senior U.S. economist at Capital Economics

• “Payrolls are sterling, but the wage data was surprisingly weak. AHE [average hourly earnings] was flat on the month and decelerated to +5.1% YoY from +5.8%. It does not appear that there was a mix-shift issue as several industries saw modest outright declines that offset increases in retail and transportation. Is this a one-month blip? Possibly. It’s also possible that the uptick in the workweek biased the numbers lower as well, but unfortunately it is impossible to take away too much detail from one month’s print. Wages will be the focus for next month’s data release, for sure.” —Thomas Simons and Aneta Markowska, economists at Jefferies

• “More surprising perhaps than the headline pop was a flat print for average hourly earnings after a string of hefty gains … . While the soft wage print in this report might provide some temporary relief to a Federal Reserve that has become increasingly worried about the inflation outlook, the surge in jobs and drop in the jobless rate will only inspire a series of rate hikes beyond the March 16 lift-off.” —Sal Guatieri, Senior Economist at BMO Capital Markets

Related: Fed’s Powell signals 25-basis point rate hike is coming in two weeks – and more tightening after that

• “What this tells me is that the U.S. economy is open for business. Omicron is in the past, and businesses expect demand to remain strong going forward. As the health situation improves, mask mandates ease and warmer weather rolls in, we should continue to see robust jobs growth over the summer, since we’re still 2.1 million jobs shy of pre-pandemic levels.” — John Leer, chief economist at Morning Consult

• “Very very strong payrolls report: +678k jobs in February, with unemployment edging down to 3.8%. Add in solid positive revisions that added a total of +92k to the past two months, and this is a job market that’s really motoring.” — Justin Wolfers, professor of public policy and economics at the University of Michigan

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