ALBERT EDWARDS: The Fed is about to cause a bond market ‘bloodbath’

The US economy added a better-than-expected 235,000 non-farm payrolls last month to drag down the unemployment rate to 4.7 per cent, around the Fed’s estimate of full-employment.

That lifted the year-on-year increase in wages to 2.8 percent from 2.6 percent in January.

The unemployment rate now has been below 5% for 10 straight months.

But that also means that February’s job gains probably overstate the underlying strength of the labor market, and there could be payback in the coming months with somewhat slower hiring in the spring. According to the data, approximately 83,000 veterans in this group remain without work.

In December, Fed policymakers had forecast that they would raise rates three times this year. There have been been 177,000 jobs added in construction over the past 6 months, but this is the single largest 1-month gain since the Great Recession.

Unemployment was down slightly in the new figures from 4.8% to 4.7%, and the number of people unemployed for longer than 27 weeks declined slightly.

Job growth has averaged more than 186,000 per month since January 2010, a recovery that predates Donald Trump’s presidency.

The seasonally adjusted rate dropped one-tenth of a percentage point from the previous month.

That was well above analyst forecasts and just shy of the 238,000 new positions added in January. Gary Cohn, fresh out of Goldman Sachs and now the directorship of Trump’s National Economic Council, said on CNBC right after the release of the figures: “This number reaffirms everything that we’re trying to do”. It now stands at 9.2 percent, the lowest rate since the Great Recession. And wage growth accelerated, with average hourly earnings registering a year-on-year gain of 2.8 percent.

The central bank, in holding the line on its 0.5 per cent trend-setting interest rate target earlier this month, cited “significant uncertainties” in Canada’s economy as it weighed whether to move that rate up or down. Trump tweeted on Wednesday, his optimistic tone showing a marked change from last month’s press conference in which he claimed to have inherited “many problems across government and across the economy”.

“Job gains occurred in construction, private educational services, manufacturing, health care, and mining”, Willian J Wiatrowski, Acting Commissioner Bureau of Labor Statistics, said in a statement.

There are other possible variations (there are at least 6 version of unemployment, U 1 through U 6) and they’re all reported at the same time in the same place.

The concern about rising prices can partly be traced to a tight labor market that’s forcing employers to bid up wages as they compete for fewer available workers.