Analysts had expected to see a non-farm payrolls figure of 205,000 in the second month of the year but the actual figure was much higher at 313,000. Meanwhile, the average hourly wage grew by a modest 0.1 percent, while the year-over-year increase declined to 2.6 percent from 2.9 percent in the preceding month. Rising jobs but declining average hourly wage growth pave the way for the US Federal Reserve to raise its benchmark interest rate at the March policy meeting. Previously, January's annual wage growth rate had triggered fears over inflationary pressures in the USA. Thus, markets started to fear four interest rate hikes in 2018, rather than three. These fears are now expected to ease, implying investors will regain appetite for stocks.

One month does not make a trend, however (especially considering the big rise in construction jobs could be a temporary phenomenon as new work occurred due to weather-related damages). But, when we take a look at US jobs growth in the previous months we detect a strong trend with the three-month average job growth at 242,000 a month. Meanwhile, other data released by the government earlier this week showed that initial jobless claims are still near their lowest level in nearly 50 years, implying layoffs are down while employers are trying to hold on to their workers.

US February 2018 Jobs Report:

  Forecast Actual
Nonfarm Payrolls
   205K  313K
Unemployment Rate    4.0%  4.1%
Average Hourly Earnings (Y/Y)
   2.8%  2.6%

Change in Nonfarm Payrolls:

  Sep. 17 Oct. 17 Nov. 17 Dec. 17 Jan. 18
Feb. 18
Nonfarm Payrolls
   14K   271K   216K   160K   239K   313K