Payrolls increased by 235,000 jobs in February, well above the consensus expectations. Much of the strength was in goods-producing industries, which added 95,000 jobs; construction especially benefited from the milder winter. The services segment lost 26,000 jobs as a result of the weakness in retail. The unemployment rate declined from 4.8% to 4.7%, even as the participation rate increased to 63%.
Risk of Recession
The probability that the United States economy will fall into a recession in six months fell from 9% in December to 8% in January. The baseline at which a recession is expected to occur is normally 60%. This is the seventh decline in the past eight months and puts the probability of recession at the lowest level since 2015. Rising stock prices, a decline in initial claims, and an increase in housing permits contributed to this trend.
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