Home   Logon   Portfolio Managers   Research and Commentary   About Us    Contact Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
  Nonfarm Payrolls Increased 678,000 in February
Posted Under: Data Watch • Employment • Government • Inflation • Fed Reserve • Interest Rates • COVID-19
Supporting Image for Blog Post

Implications:  The job market improved rapidly in February, almost completely top to bottom.  Nonfarm payrolls rose 678,000 for the month while payrolls were revised up 92,000 for December and January.  Meanwhile, civilian employment, an alternative measure of jobs that includes small-business start-ups, increased 548,000, confirming the strength.  As a result of the increase in employment, the unemployment rate dropped to 3.8%, a new low for the economic recovery.  Meanwhile, the labor force grew 304,000 in February and the labor force participation rate (the share of workers who are either working or looking for work) rose to 62.3%.  That's still below the 63.4% pre-COVID, but it's the highest so far in the recovery.  Some may quibble with the strength of the report because average hourly earnings were unchanged in February.  However, that could be due to more lower-wage workers getting jobs, which is not a bad sign.  Hourly wages are up 5.1% from a year ago, lagging inflation, and we expect that to be a persistent problem.  Perhaps the best news in today's report was a 0.8% increase in the total number of hours worked in the private sector in February. Hours are up 5.5% in the past year and are now only 0.2% off the pre-COVID peak.  Digging into the guts of the report reveals more good news.  The median duration of unemployment fell to 9.6 weeks versus 17.9 weeks a year ago.  Meanwhile, the share of unemployed who decided to quit their prior job hit 15.1%, tying the highest level in the past twenty years.  The Great Resignation is real.  Putting all the data together, we think the improvements in the labor market will let the Federal Reserve focus in on fighting inflation, a fight they are starting woefully late.  Look for a series of rate hikes starting later this month, with quantitative tightening starting by mid-year and ramping up more aggressively than during the prior cycle of rate hikes prior to COVID.  The job market is still not perfect.  Payrolls are still 2.1 million short of where they were before COVID.  But we expect to close that gap later this year and then some, considering the loose stance of monetary policy.   

Click here for a PDF version
Posted on Friday, March 4, 2022 @ 10:19 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2023 All rights reserved.