At first, it seemed that the BLS' February employment report was finally the one we were looking for. In fact, it was just about perfect according to BusinessWeek Online, which headlines its story "February's 'Goldilocks' Jobs Report."
February's employment report, released Mar. 4, could be described by borrowing a phrase from a famous fairy tale: Not too hot, and not too cold. Indeed, it may have been "just right" for Wall Street, as it was robust enough to warrant optimism on the economy, but no so strong as to significantly alter the Federal Reserve's "measured" policy path.
The headline figure for the report, nonfarm payrolls, easily cleared the already-high hurdle forecasters had set for job growth on the month. The 262,000 rise in nonfarm payrolls exceeded economists' median expectation of a 219,000 increase. But the rest of the report was notably tame and may point to some moderation in other key economic reports for the month.
The gaudy headline number masked some tame data elsewhere. The unemployment rate jumped to 5.4% for the month, vs. the median forecast of 5.2%, matching January's rate. And the average workweek, at 33.7 hours, was below the median forecast of 33.8 and flat with the previous month's downwardly revised figure...
Hourly earnings were flat, vs. a median forecast of a 0.2% rise, following an upward revision for the previous month to 0.3%... The February data suggest earnings growth remains relatively lackluster -- especially when adjusting for 2% to 3% inflation.
Wow. Something for everyone. Equity markets sure liked it. From Bloomberg:
U.S. stocks rose as a government jobs report spurred optimism about the economy, helping the Standard & Poor's 500 Index erase its losses for the year to close at the highest since July 2001...
"Maybe you've got the best of both worlds here,'' said Scott Vergin, who manages $2.5 billion at Thrivent Financial for Lutherans in Minneapolis. "The economy is still going to grow, but it's not growing at a fast enough pace to get the Fed to raise rates faster.''
But I guess the prospect of "measured" interest rate increases is not what the foreign exchange markets wanted to see. From FXSTREET.com:
The dollar fell sharply across the board on Friday after a U.S. employment report, though stronger than expected, disappointed traders hoping for a blockbuster number...
Following a strong service sector employment indicator on Thursday some expectations had risen to as high as 400,000, traders said, thereby making the disappointment at 'only' 262,000 more pronounced.
"The market was leaning toward a good number, but I think the market was disappointed a bit there," says Todd Elmer, currency strategist at Barclays Capital in New York. "If you look at this from a directional standpoint, I think you'd look to be short of dollars."
There's just no pleasing some people.
Also: William Polley keeps the historical record, as does Barry Ritholz; at Angry Bear Kash sounds hopeful, but pgl grouses about the press coverage (and both usefully point out the divergent stories in the payroll and household surveys -- I'll take the former, always); Max remains unimpressed.