February jobs data a 'goldilocks report': Economist

The February jobs report came in hotter than expected with 275,000 non-farm jobs added, but it also revealed an increase in the unemployment rate and stagnation in average hourly earnings year over year. RSM Chief Economist Joe Brusuelas and Citi Wealth Head of Investment Solutions Kristen Bitterly join Yahoo Finance to discuss how to interpret the results.

Brusuelas lays out his characterization of the report: "I think we should characterize it as one of those goldilocks reports, where it's just right. When you net in the downward revisions from the past two months, total unemployment only increased by 108,000, that's it. Really that's just where you need to keep employment stable. If you are a central bank policymaker, that's what you want as further evidence that you are not going to see a risk if the economy overheats.

Bitterly offers insight into how the data will inform the Fed's decision-making: "So there is a question about the quality of employment and I think that overall there is a little bit of softening. When we look at private sector employment and hiring, that's the lowest level that we've seen in quite some time. So I think it's giving the market what it wants and it's giving Chair Powell some path to actually that first cut being in June. "

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

JULIE HYMAN: The US economy creating more new jobs than expected in February. Meanwhile, downward revisions to job growth in prior months suggesting signs of some softening in the US labor market. Though, looking beneath the surface, there may be more to the state of the labor market that investors should consider.

Here to discuss, Kristen Bitterly, Citi Wealth Head of Investment Solutions, and Joe Brusuelas, RSM Chief Economist. Thanks to you both for being here. It's great to see you in person.

JOE BRUSUELAS: Good to see you, too.

JULIE HYMAN: So much fun. Joe, I want to start with you here because these numbers are maybe a little confusing on the surface, right? You have the unemployment rate going up to 3.9%. You have downward revisions in the prior couple of months.

Is the labor market getting worse? Is that what's happening here? A little softening. How should we characterize it?

JOE BRUSUELAS: I think we should characterize it. This is one of those Goldilocks reports, right, where it's just right. When you net in the downward revisions from the back past two months, total employment only increased by 108,000. That's it.