The last time the Bureau of Labor Statistics released the employment report, there was something gnawing at the street- wages were too high. So, the market swayed and buckled sending major indices rolling along lower to test potential breaking points. Even though those key support points held, and the markets passed that test, it underscores the kind of Fed-anxiety that haunts the market far too much.
Fast forward to this morning, and the script has been flipped.
Jobs grew by 242,000 in February beating the consensus of 190,000. That would seem like to be a red flag at the Fed, which is obsessed with hiking rates. Yet, wages actually declined to average hourly wages of $25.35, down $0.03.
The unemployment rate gets all the air time and ink, but it’s not the most important component beyond the headline number and wages. Participation is critical as a reflection of folks getting off the sofa to even look for jobs. There is a long way to go before that schism is healed.
In the meantime, the most important way of measuring current job success versus past conditions is the employment-population ratio. While it continues to improve, we are a long way from pre-recession levels.
I’m still combing through the data, and the street is still trying to decide if this is not-too-hot and not-too-cold.