Plenty of Momentum in the Labor Market
- Nonfarm payrolls added 295,000 jobs in February, while the unemployment rate dropped to 5.5 percent. Gains were broad-based, but average hourly earnings barely grew.
- The strong payroll number bodes well for consumer spending, which continued to exhibit strength in January. Meanwhile, real disposable incomes shot up, adding more to consumers’ ability to spend in the coming months.
- The factory sector has been notably weaker. The ISM manufacturing index fell for the fourth straight month in February, and factory orders declined again in January.
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