What happened last week?
- Strong job gains
According to the official employment report released on Friday, U.S. employers added 242K jobs in February, a larger than expected increase that highlighted the labor market’s strength despite global financial and economic challenges.
The upward revisions for December and January showed a total of 30K more jobs than previously reported.
Moreover, the overall share of Americans in the labor force ticked up 0.2 of a percentage point to 62.9 percent.
On the other hand, the 0.1 percent decline in average hourly wages in February was the disappointing part of the report, after January’s higher than expected 0.5 percent increase.
The fall in wages despite strong employment gains surprised the markets which were expecting a 0.2 percent increase.
- Fed's Beige Book
Last week, the Fed released its Beige Book, a key report on the U.S. economy consisting anecdotal information collected from business contacts by 12 regional Fed districts across the country.
The report showed that economic activity continued to expand in seven districts from early January to late February, but conditions varied considerably across regions and within sectors. In the previous report, 10 districts saw an expansion in their economies.
In addition, financial market volatility in Boston, Cleveland and Chicago was cited as a reason for consumers’ reluctance to spend.
Overall, the less optimistic report pointed to the difficult debate the Federal Open Market Committee (FOMC) members will have when they next meet to decide the path to take on interest rates on March 15-16.
- New week ahead
This week, the U.S. data calendar looks relatively sparse.
Markets will be following the speech of Fed Vice President Stanley Fischer on Monday afternoon.
Later in the week, all eyes will be on the economic statistics coming from the Eurozone and Asia.
On Thursday, The European Central Bank’s interest rate decision and press conference will determine investors behavior and accordingly, the fate of markets.