On the February Jobs Report

A headline beat, but probably a small miss versus the whisper-number and the “Trump tweet-number.” On the surface, this is a middle-of-the-pack jobs report. That said, seven years into the expansion, having payroll growth still strong – and wage growth still modest – implies that there is still lots of slack in the labor force. For the first month we can remember, job growth was evenly distributed across wage-levels – that is, no bias toward lower-paying sectors. With the Fed committed to gradual rate hikes tracking the gradually rising “natural rate of interest,” and “animal spirits” set loose since the election, we think the present expansion has room to run.