On the February Jobs Report

A nice headline beat, with upward revisions that partially erase last month’s big miss. The Fed will focus on the drop in average hourly earnings. But this comes in addition to a drop in hours worked, and a worsening of long-term unemployment. The labor force expanded again for the fifth straight month. But it remains well below trend, and the newly employed concentrated in poor-paying jobs. With more people working fewer hours for less pay, even a Phillips Curve dead-ender would be hard pressed to hike rates again for quite a while, especially given the markets’ severely negative reaction to “liftoff.”