Expanding Job Market Sends Mixed Signals to Policymakers, Treasury Yields Edged Lower

Barry Adams
08 Mar, 2024
New York City

Benchmark indexes traded higher in early trading, and the popular indexes are set to extend gains after a week of turbulent trading. 

The S&P 500 index and the Nasdaq Composite edged higher after investors reviewed the nonfarm payroll update for February. 

The February jobs report offered a mixed picture of expanding payrolls, but the jobless rate also rose, sending conflicting signals to policymakers. 

The economy is still adding jobs above its long-term average, and that sustained expansion is also attracting more people to the job market, driving unemployment higher. 

Treasury yields edged lower after the release of the jobs report. 

 

U.S. Job Growth Stays Hot

Total nonfarm payroll employment increased by 275,000 in February, and the unemployment rate increased to 3.9%, the Bureau of Labor Statistics reported Friday. 

The February month's increase was higher than the average 230,00 monthly gain in the last 12 months. 

The unemployment rate rose by 0.2 percentage points to 3.9% in February, and the number of unemployed people increased by 334,000 to 6.5 million. 

A year earlier, the jobless rate was 3.6%, and the number of unemployed people was 6.0 million.

The number of long-term unemployed, those seeking jobs for 27 weeks or more, held steady at 1.2 million in February. 

Moreover, the employment participation rate and employment-to-population ratio held steady for the third month in a row at 62.5% and 60.1%, respectively. 

In addition, there are 5.7 million people still seeking jobs, but not in the labor force, as in the previous month. 

Average hourly earnings for all employees rose at a slower monthly pace of 0.1% and an annual rate of 4.3% to $34.57 in February. 

The change in total nonfarm payroll employment for December was revised down by 43,000 to 290,000, and the change for January was revised down by 124,000 to 229,000. 

With these revisions, employment in December and January combined is 167,000 lower than previously reported. 

 

U.S. Indexes and Yields

The S&P 500 index increased 0.2% to 5,165.60, and the Nasdaq Composite advanced 0.4% to 16,324.28. 

The yield on 2-year Treasury notes decreased to 4.42%, 10-year Treasury notes inched down to 4.05%, and 30-year Treasury bonds edged down to 4.22%.

WTI crude oil decreased $0.21 to $78.70 a barrel, and natural gas prices decreased 3 cents to $1.78 a thermal unit.

Gold increased by $7.50 to $2,155.90 an ounce, and silver rose 23 cents to $24.39. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.23.

 

U.S. Stock Movers

Broadcom declined 0.4% to $1,402.0 after the advanced chipmaker reported better-than-expected quarterly results and estimated revenue in the current quarter in line with market expectations. 

Marvell Technology decreased 4.2% to $81.50 after the semiconductor company reported mixed quarterly results and issued a lighter-than-expected revenue and adjusted earnings outlook for the current quarter. 

Costco Wholesale declined 3.8% to $761.41 after the membership retailer reported weaker than expected revenue in its latest quarter. 

Gap Inc. increased 9.5% to $21.17 after the apparel retailer reported better-than-expected holiday quarter sales of $4.3 billion and earnings per share of 49 cents.