NEW YORK (Reuters) - The pace of job creation by U.S. private employers accelerated more than expected in February, a report by a payrolls processor showed on Wednesday.
U.S. 4th-qtr unit labor costs revised up sharply
U.S. wages rose much faster than initially thought in the fourth-quarter amid modest gains in productivity, but labor market slack will keep inflation pressures contained.
CRAIG DISMUKE, CHIEF ECONOMIC STRATEGIST, VINING SPARKS, MEMPHIS, TENNESSEE
ADP: ”It’s a good report. I‘m looking at this for direction on the labor market. This is a critical moment. We might be able to sustain it for a while.
”The labor market is still fundamentally weaker than five years ago. We are still in a big hole. On the payroll report, we are still running above the 150,000 breakeven level for a modestly growing economy.
“I‘m not convinced that the unemployment rate will pick up. I don’t think necessarily that discouraged workers will start looking for jobs because they are hearing about this more positive employment news.”
PRODUCTIVITY/LABOR COSTS: “There are some inflationary pressures building. This could start worrying the market, but everyone thinks inflation is still tame. You have rising oil prices and unit-labor costs. We don’t have stagflation yet, but the conditions are there, which we need to watch closely. We still have sub-par growth. The Fed is in a tough position here.”
OMER ESINER, CHIEF ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON
“On balance, it’s a pretty solid number and another data point that shows the jobs market is improving. I think it’s something that should continue to support the dollar as it contrasts a lot with the disappointment coming from data overseas, whether from the euro zone or Asia.”
“It was spot on expectations, essentially. It doesn’t really do much to change the positive picture on employment at this point, there is still a positive bias here.”
PETER CARDILLO, CHIEF MARKET ECONOMIST, ROCKWELL GLOBAL CAPITAL, NEW YORK
“It’s in line with expectations and consistent with jobs improvement, and it’s a trend that is going to continue. But hiring is not accelerating due to the European woes and the effects of Europe’s recession in the U.S.”
BETH ANN BOVINO, SENIOR U.S. ECONOMIST, STANDARD & POOR‘S RATINGS SERVICES, NEW YORK
“This does suggest we are moving it the right direction. It supports the expectations of another 200,000-plus in Friday’s payroll report. The jobs numbers are looking healthier.”
Americas Economics and Markets Desk