An in line print but holes underneath, especially the U6 rate and hours worked

Nonfarm payrolls in February grew by 151k, just below the estimate of 160k and the two prior months were revised down by a combined 2k. So, this is a rare day where the headline figures are around expectations. But, as always, under the hood is where we must look too.

After the large benchmark revisions last month, the household survey saw a drop of 588k jobs and because it was more than the decline of 385k in the labor force, the U3 unemployment rate ticked up by one tenth to 4.1%. Of particular note, the all in U6 rate that also includes those working part time but want a full time job and also those who are not looking for work but would take a job if offered jumped to 8% from 7.5%, the highest since October 2021. There was a big rise in the number of those working part time for ‘economic reasons’, both due to ‘slack work’ and ‘can’t find full time.’

An issue too continues to be hours worked where they held at just 34.1, remaining at the lowest level since 2010 and the same level it hit in March 2020 during you know what. The participation rate fell to 62.4% from 62.6% and that level was last seen in January 2023. But, it held at 83.5% for those aged 25-54.

Average hourly earnings rose .3% m/o/m as expected but January was revised down by one tenth to a .4% gain. Versus last year, wages grew by 4%. Combine this though with the sluggish hours worked and average weekly earnings were up by 3.4% vs 3.6% in January and 3.4% in December.