Flash Macro: U.S. Jobs report

In line with our 2024 Outlook, the February U.S. payrolls report shows a robust but not overheating labor market. Looking at the details, Nonfarm Payrolls grew +275k during the month, above consensus of +200k and up from +229k last month (downwardly revised). While the headline number was quite strong, many other components were more subdued. Job growth for the prior two months was revised down by a net -167k. Average hourly earnings moderated to 4.3% y/y, which was in line with consensus but down from 4.4% last month.

Maybe even more importantly, the unemployment rate rose 20 basis points to 3.9% from 3.7%, vs. a consensus expectation for flat unemployment. A -184k decline in Household Survey employment drove the jump in the unemployment rate. Household Survey employment has been persistently lower than Establishment Survey employment for several months now, which we view as a signal that underlying job growth is a bit less robust than headline NFPs indicate.