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The big economic news of the day came in better than expected, with non-farm payrolls for February growing by 175,000 last month compared to the 150,000 that had been forecast. There was also a non-trivial upward revision to January’s data, lifted from an originally-reported 113,000 to a slightly more respectable 129,000.
To keep the US economy progressing as desired, we would really want to be seeing payroll growth in the 200,000+ region, but given the likely dampening effect of bad weather, overall this is an upbeat result once the circumstances are taken into account.
The US unemployment rate worsened though, creeping up to 6.7% from 6.6%. This is unlikely to stay the Fed’s hand from a further taper this month, though, with the payroll growth probably doing enough to assuage any concerns over weather-instigated softness in the economy.
The employment report was sufficiently well-received by investors to push the S&P 500 to yet another new intraday record, touching a high of 1883.58, but by early afternoon in New York share prices were beginning to dip. The S&P 500 slipped back 0.13% on the day to 1874.9, though the Dow Jones managed to hold on in positive territory, up 0.13% or 21 points at 16,443.
Selling has likely been fostered by the fact that we are heading into the weekend with the Ukraine situation still very much up in the air. After a solid upward run this week, it is not surprising to see some profit-taking to mediate against the risk of deterioration in negotiations between the West and Russia.