NFP: Staggering increase should slow in March – Nordea

Nonfarm payrolls increased by a staggering 273k in February, clearly overshooting consensus. However, payroll numbers should clearly slow in coming months, in the opinion of analysts at Nordea.

Key quotes

“Nonfarm payrolls surprised clearly to the upside with a monthly increase of a staggering 273k, while the January figure was also revised up by 48k (85k for the last two months). The 3-month average payroll number increased from 239k to 243k, while the 12-month average is now at 200k.”

“The wage component accelerated slightly on a monthly basis with a reading of 0.3% (last month: 0.2%, consensus 0.3%).”

“The full negative effects from Covid-19 will not come into play until next month. Hence, expect much weaker numbers in March and April.”

“The financial markets did almost not react to the strong job report. Focus is on COVID-19 and the Fed response. This month’s report was simply ‘too old, pre-corona’ news.”