Hiring Surged in February as Lockdown Restrictions Eased; NFP up 379,000

Hiring in the U.S. economy accelerated sharply in February, reviving hopes of a rapid recovery from the winter wave of layoffs due to Covid-19 restrictions.

Nonfarm payrolls expanded by 379,000 through the middle of the month, almost double the 182,000 consensus forecast. The number for January was also revised sharply by higher by over 100,000 to 166,000.

The data reflected the gradual reopening of parts of the U.S. economy as the pressure on the country’s hospitals eased off during the month. Gross gains in services employment totalled 513,000, with the leisure and hospitality sector alone adding 355,000 jobs as bars and restaurants resumed business, albeit often still under capacity constraints.

The figures are likely to reinforce concerns that the Federal Reserve will start to withdraw monetary stimulus from the economy sooner than originally planned.

In a speech on Thursday, Fed Chairman Jerome Powell had again said that he wanted to see substantial progress in bringing down unemployment before thinking about tightening monetary policy. Powell has repeatedly stressed that the U.S. is still operating with around 10 million fewer jobs, relative to its pre-pandemic state.

The unemployment rate fell to 6.2% from 6.3% in January, while the broader U6 measure of joblessness, which captures a broader sample of underemployment, remained steady at 11.1%. The labour force participation rate stayed at 61.4%.

The numbers emboldened those willing to be on higher interest rates: 10-year U.S. Treasury yields rose to 1.58% from 1.56% immediately before the release, while five-year yields, which are more sensitive to expectations of changes in Fed policy, rose 4 basis points to 0.84%. They’ve now risen some 15 basis points this week.