US NFP: A no move from the Fed would be destabilizing - BBH

According to analysts from Brown Brother Harriman, today’s jobs data from the US has nothing that ought to cast doubt on the likelihood of a rate hike from the Federal Reserve next week.  

Key Quotes: 

“The US jobs report was largely in line with expectations. February was the second consecutive month that the US economy created more than 200k jobs. It is the first time since last June and July.  The 235k is just below the revised January 238k gain (initially 227k).”

“A shadow of disappointment comes from average hourly earnings.  They rose 0.2% compared with a median guesstimate of 0.3%. However, the disappointment was blunted by the upward revision to the January figure to 0.2% from 0.1%.  This means that the year-over-year pace stayed steady at the 2.8%, which is still the upper end of the recovery.”

“There is nothing in the report that ought to cast doubt on the likelihood of a Fed hike next week. The market has it discounted, and given the recent string of commentary from Governors as well as regional presidents, not to move would be destabilizing and undermine the credibility of the Federal Reserve.”

“Recall that the first quarter has been notoriously weaker than the other quarters during the US recovery and expansion cycle. The first quarter this year is shaping up to be consistent with that pattern.  US growth appears to be tracking a little below trend. “