NEW YORK U.S. employers cut a smaller than expected 36,000 jobs in February, leaving the unemployment rate unchanged at 9.7 percent, according to a government report on Friday which said it was unclear how severe weather had impacted payrolls.
KEY POINTS: * The Labor Department said job losses for December and January had been revised to show 35,000 fewer jobs lost than previously reported. * Analysts polled by Reuters had expected non-farm payrolls to drop 50,000 last month and the unemployment rate to edge up to 9.8 percent. The median forecast from the 20 most accurate forecasters also saw payrolls falling by 50,000, while the 10 most accurate economists predicted a 70,000 decline. * Analysts had feared that the heavy snowstorms that hit large areas of the United States during the survey week for the employment report would cause a huge drop in payrolls. * However, the Labor Department said while the winter storms might have affected payrolls, it was difficult to quantify the net impact on employment. * "We cannot say how much February's payroll employment was affected by the severe weather," said Bureau of Labor Statistics Commissioner Keith Hall.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM, WEST CHESTER, PENNSYLVANIA:
"It looks like a very small weather impact. The broad point is that job market is flat coming from very heavy losses a year go. We should have very high growth from the Census hiring. The real test will come in the summer and winter when Census jobs evaporate.
"It's weighing on wage growth. Compensation is slowing. But the jobs market is not a blistering headwind for consumers. Consumers will continue to spend but they are not going to spend with gusto.
"This is still a very tough job market. It's hard to say we are in the clear and off and running. It's still far from normal.
"This is consistent with no change in monetary policy. The Fed cannot raise until unemployment goes definitively lower."
PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK + CO, NEW YORK
"February payrolls fell by 36,000, better than the estimate which had been falling due to concerns with weather. But two weeks ago, the estimate was flat. The average term of unemployment fell to a still elevated 29.7 weeks. The bulls had a weather-related free pass today but the data still shows a very difficult, albeit slowly improving labor market."
PETER CARDILLO, CHIEF MARKET ECONOMIST AT AVALON PARTNERS, NEW YORK:
"This is a good number. In fact, considering weather-related issues, this can be even viewed as growth. Especially when you look at the manufacturing number, it showed an uptick. This is signaling a possible reversal for March numbers. It shows that job growth is slow in pace but right on track."
MIKE FITZPATRICK, VICE PRESIDENT, MF GLOBAL, NEW YORK:
"This particular number will be open to a lot of interpretation. Job losses coming in well under expectations will probably lend credence to the argument that the economy is improving and so should energy demand. Policymakers have been running the Keynesian/Depression playbook so they will be out in force cheering their own efforts."
MICHAEL MORAN, CHIEF ECONOMIST, DAIWA SECURITIES AMERICA, NEW YORK:
"Traders and investors are assuming there was a pretty good-sized weather effect restraining the number and if we only had 36,000 jobs down in February, that it could have been a positive number were it not for the bad weather."
RICHARD DEKASER, PRESIDENT, WOODLEY PARK RESEARCH, WASHINGTON:
"Losses were concentrated in weather-sensitive areas like construction so weather probably played a role. Which means absent the usually affect of weather, we would have a gain of jobs in February."
"The unemployment rate was very good news and it didn't snap back with the blizzards."
"There is no inconsistency between consumer sentiment surveys and these job losses. There are still job losses and unemployment remains high. The employment trend is improving but it remains unambiguously weak."
"With unemployment still high, there will be continual talk about job stimulus to address that. The urgency for such stimulus will diminish as the economy continues to improve."
"The Fed has done incremental moves toward monetary normalization, but a rate increase will still be months away."
TOM PORCELLI, LEAD U.S. ECONOMIST AT RBC CAPITAL MARKETS, NEW YORK
"The weather may have not played the role people had feared. Our first impression is that given what people were expecting it was a decent report. We are already seeing the reaction in markets. Yields are rising in Treasury markets and that makes sense given the fact this was a good report."
PAUL SORBERA, PRESIDENT, ALLIANCE CONSULTING, NEW YORK:
"There were 48,000 temporary jobs and that's something that's showing that there's demand coming back. Business is picking up, managers are much more secure, they're more forward looking. The interviewing level is very high. In the executive level, in the financial industry where I mostly work, the volume of interviewing is at a three-year peak. A lot of managers have their fingers on the trigger, pulling it at some points but they're still very cautious. We need to get a little more positive momentum and people will have a lot more confidence, but I see it already."
HUGH JOHNSON, CHIEF INVESTMENT OFFICER, JOHNSON ILLINGTON ADVISORS, ALBANY, NEW YORK:
"These numbers are clearly better than expected. The unemployment rate is below expectations. The loss of 36,000 jobs is better than expected, so I think on balance this is good news. The big surprise in my view was the gain in manufacturing jobs...which we've now seen for two straight months. The hours worked is a little troubling, and what's troubling (also) is the drop in manufacturing hours worked. (These numbers) do tell you we're headed toward job gains by the spring time. The trend is clear."
JOHN KILDUFF, PARTNER, ROUND EARTH CAPITAL, NEW YORK:
"Given the outlook for persistent job growth in the coming months, this data is very supportive for energy prices. As employment rates recover, gasoline demand will be the most reactive and increase rapidly into the spring and summer. We will need the U.S. refinery industry to ramp up production in order to avoid an economically damaging surge in gasoline prices."