US jobs increased by 379,000 in February, well above the general consensus of 185,000 to 200,000 jobs, much better than the January or December report.
The United States added 117,000 out of 105,000 planned jobs in January and lost 306,000 revised jobs in December. In February, the unemployment rate fell from 6.3% to 6.2%.
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The positive report could create more volatility in the U.S. Treasury bill market, David Beckworth, a former international economist at the U.S. Treasury Department, told CoinDesk.
Bond yields rose to 1.5% on Thursday after US Fed Chairman Jerome Powell said the economy would experience temporary inflation upon reopening. The rate climbed again to 1.61% after the release of Friday’s jobs report.
Due to the market’s sensitivity to the interest rate outlook, there is a possibility that there is a sell off of high-risk assets (like bitcoin) with the jobs report exceeding estimates, said Steven Kelly. , Research Associate in the Yale Financial Stability Program.
The Fed is unlikely to back down on quantitative easing or raise rates in response to the volatility of Treasuries yields, Kelly added, but it could consider yield curve control or Operation Twist.
The Fed is expected to see “the significant unintended consequences of QE” to pull out its $ 120 billion monthly bond purchases, Kelly said. For now, bitcoiners can still count on the Fed to bring more liquidity to the markets and give investors the liquidity to invest more in riskier assets.
“Part of QE isn’t just about reducing returns,” Kelly said. “It’s about encouraging the search for yield to a certain extent. It’s often cited as a downside to QE’s financial stability, but it’s also part of the problem – it’s about discouraging a flight to security. ”
Industries affected by the pandemic are coming back
The biggest increase in jobs came from the service sectors hardest hit by COVID-19 – the leisure and hospitality industries added 355,000 in February.
“We have an economy that is about to get back on track,” former Federal Reserve macroeconomist Claudia Sahm said Thursday. “It is still far from the accomplished mission; 10 million jobs are still missing. “
The employment-to-population ratio, which measures the number of people employed relative to the total working-age population, changed little month-over-month at 57.6%, down 3.5 percentage points From one year to another. Employment declined in education, construction and mining of state and local governments, with a loss of 37,000 jobs in local communities and 32,000 jobs in public administration.
The actual increase in jobs could be higher since the Bureau of Labor Statistics survey was released three weeks ago, Sahm added. Vaccinations have increased significantly since then – US President Joe Biden announced this week that there will be enough vaccines to cover all Americans by the end of May, two months ahead of previous estimates.
While the additional jobs are not insignificant, they are unlikely to have an impact on stimulus negotiations, Sahm added. This means that somewhere between $ 1.5 trillion and $ 1.9 trillion (depending on negotiations) will soon be available to Americans, she said.
Update (March 5, 15:02 UTC): Adds additional details from jobs report and expert commentary.