US non-farm payrolls jump past forecasts in February

US non-farm payrolls in February blew the doors off analysts' estimates.

According to the Department of Labor, hiring jumped by 273,000 last month, easily surpassing the median forecast on the Street for an increase of 175,000.

And contrary to some economists' projections, readings for the prior two months were revised higher by a combined 85,000.

The rate of unemployment did tick down by a tenth of a percentage point to 3.5%, as expected, as did average hourly earnings which grew at a year-on-year pace of 3.0%.

Some of the details of the report were quite strong as well, with the index of aggregate weekly hours, the closest thing to a monthly GDP figure, bounding ahead by 0.5% month-on-month following a rising of just 0.1% in January.

The length of the average workweek edged up from 34.3 hours in the month before to 34.4 (consensus: 34.3).

"Unusually warm weather boosted construction payrolls againm sending them higher by 42,000 and census hiring only boosted employment by 7,000," said Paul Ashworth at Capital Economics.

Payrolls in healthcare also registered a big 56,500 person jump, alongside an increase of 41,000 in professional and busines services alongside a 45,000 rise in government.

But declines were seen in wholesale trade (-2,600), retail trade (-7,000) and in transportation and warehousing (-4,000).

"Data releases like today’s Employment Report are unlikely to show any meaningful impact from the virus until April at the earliest. Given the lag in many data releases, market participants may place more weight on coincident economic indicators like weekly jobless claims and survey based leading indicators such as readings on consumer and business sentiment in the interim," said Rob Mangrelli, director at Chatham Financial.

"Yields continue to make new record lows in the U.S. and current market positioning would see a Fed Funds rate near 0% by year end."

Ian Shepherdson at Pantheon Macroeconomics was of a similar view: "Overall, these are great numbers, but unfortunately this is news from another planet, and it does not mean that the Fed was wrong to cut rates this week [...] April likely will be much worse."

-- More to follow --