Heading into today’s closely watched payrolls report which as we reported earlier was expected to show a sharp improvement in the labor market, it seemed that stocks were faced with a lose-lose dilemma: a strong number would boost inflation fears further, sending yields higher and crashing stocks; a bad number and the recovery narrative would be hammered as virus fears returned, hammering stocks.
So as traders were busy navigating this tricky mind maze, moments ago the BLS reported that as expected, in February the jobs picture improved dramatically, with the US adding a whopping 379K jobs, nearly double the 198K consensus estimate. The private payrolls number was even more remarkable: coming in at 465K jobs, it was more than double the 195K expected… and also 45K more than the highest forecast of 420K from 35 estimates submitted to Bloomberg.
Alas there’s was a catch: About 75% of the jobs added in February were waiters and bartenders (+286,000), so any questions about the quality of the job gains can be put on the backburner. As Blackrock PM Jeff Rosenberg puts it, “This is a bit of a down-payment on a reopening report…”
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