- Mark Zandi, chief economist at Moody's Analytics
The US economy created more jobs than expected in February, while the unemployment rate remained unchanged, highlighting the ongoing improvement in the labour market. US non-farm payrolls increased by 242,000 last month, compared with economists' expectations for 195,000 new jobs, according to the Labor Department. Moreover, the previous two months' revisions were positive, adding a net 30,000 uncounted jobs. The average pace over the past three months, at 228,000, albeit slower than late last year, is sufficient to keep pushing unemployment levels down. The unemployment rate held at the lowest level in eight years at 4.9% for the second consecutive month. Economists say that jobs creation would have to slow below 100,000 a month for the jobless rate to start rising.
The Fed is looking for wage-driven inflation as a catalyst to continue policy tightening. The US central bank in December introduced a quarter-point increase in its interest rate target, the first such move in almost a decade. Even though officials hinted back in November that four rate hikes would be likely this year, Wall Street is predicting much slower pace as economic growth has slowed. Traders assign just a 2% chance to a March move, with December being the first month that has a more than 50% chance.
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