Employment report beat expectations
The economy added 236,000 jobs in February, while the unemployment rate fell to 7.7% and the workweek increased to 34.5 hours. The combination of stronger job growth, gain in the work week and increase in earnings implies a solid gain in labor income in February. On net, today’s report shows stronger momentum in the economy which will help cushion, but not entirely offset, the blow from the fiscal cuts. We maintain our view that the economy will hit a soft patch in the spring. Moreover, we do not believe the Fed is ready to change course and will continue with its QE program and commitment for low interest rates.
Read the full report here.