By Carlo Versano
Employers slammed the brakes on hiring in February, adding just 20,000 jobs in February, according to the monthly government statistics released Friday morning.
The consensus estimate was for 180,000 new jobs. Still, the unemployment rate fell to 3.8 percent from 4 percent.
Stocks dropped on the news. The Dow was down roughly 150 points at noon after paring its losses from earlier in the morning.
Jeff Tomasulo, CEO of Vespula Capital, pointed to two factors behind the weak showing: miserable weather across the country, which tends to affect manufacturing and construction hiring, and the remaining disruption caused by the government shutdown, which ended in late January.
Steven Moore, distinguished fellow at the Heritage Foundation who has advised President Trump on tax and trade policy, told Cheddar the February print was an "aberration" resulting from the fact that "employers are simply running out of workers to hire" because the job market is so strong.
Similarly, Tomasulo said a single bad report like the one released on Friday doesn't necessarily say much about the bigger economic picture. September 2017 offered similarly dismal numbers, despite a strong overall trend for the year. But he said other economic factors, like the European Central Bank's surprise decision to bring back a stimulus program and extend ultra-low interest rates, combined with slowing GDP growth in China, paints a more worrisome picture than any one jobs report.
Central banks around the world don't seem to be "on the same page," Tomasulo said, and that creates confusion among investors.
Moore, who has been perhaps only second to the president in his criticism of the current Fed chair, again slammed the central bank on Cheddar, saying it is not being quick enough to understand the problem of slowing global growth and instead continues to obsess over inflation when deflation is a bigger worry for the economy.
President Trump "absolutely" made a mistake in picking Jerome Powell to run the Fed, Moore said. He argued the Fed should not only stop raising interest rates, but should actually start cutting again.
Inflation, which has an inverse relationship to unemployment, typically follows wage growth, though Moore said there has been no signs of inflation as wages have increased in this job market. (Among the silver linings in the February jobs report: wage growth continues to rise, ever so slowly. Average hourly earnings ticked up by 0.4 percent, following a gain of 0.1 percent in January.)