Monetary Policy & Inflation | US
Summary
• The February NFP shows both strong labour demand and supply.
• A sharp decline in real wages suggests strong labour supply has more than offset strong labour demand.
• For the Fed, the Ukraine crisis has become a more important policy driver than labour market pressures.
Market Implications
• Steeper curve as the Fed will respond to higher commodities prices with a lag.
Unemployment Shrinks Further From the Fed’s Long-Term Estimate
February nonfarm payrolls (NFP) were up 678,000, against a revised 481,000 in January and 423,000 expected (Chart 1). The employment increase in the more Covid-sensitive sectors (leisure and hospitality), 180,000, aligned with the past three-month average. The faster employment growth took place mainly in other sectors.
Summary
• The February NFP shows both strong labour demand and supply.
• A sharp decline in real wages suggests strong labour supply has more than offset strong labour demand.
• For the Fed, the Ukraine crisis has become a more important policy driver than labour market pressures.
Market Implications
• Steeper curve as the Fed will respond to higher commodities prices with a lag.
Unemployment Shrinks Further From the Fed’s Long-Term Estimate
February nonfarm payrolls (NFP) were up 678,000, against a revised 481,000 in January and 423,000 expected (Chart 1). The employment increase in the more Covid-sensitive sectors (leisure and hospitality), 180,000, aligned with the past three-month average. The faster employment growth took place mainly in other sectors.
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