Yesterday we had the Fed’s Beige Book, which was compiled on or before the 24th February, so about the time the coronavirus outbreak was starting to have an impact on the U.S. economy. It seems that even without the virus outbreak, growth was somewhat subdued. Whilst economic activity expanded at a ‘modest to moderate’ rate in most districts, two regional Fed districts — Kansas City and St. Louis, reported growth had come to a standstill. Overall, car sales were mixed with many other sectors reporting less need for workers. The report noted that the coronavirus had already caused some delays in the supply chain with disruption for producers, adding that there were indications that the virus was hurting the tourism and travel industries.
Today we had the non-farm payrolls, however, with what has been going on globally over the last week, this was also seen as old news with no meaning, with most of the market only taking a fleeting glance at it. Consensus was for 175k vs. 225k in January, along with the unemployment rate steady at 3.6%. The payroll release showed that 273,000 jobs were added, with the prior month’s reading revised up by 48,000 jobs to 273,000. The unemployment rate was at 3.5%. The participation rate was 63.4, in line with forecasts and the same as last month.
As mentioned, the virus was not seen in this month’s report as the data would have been collected at the tail end of last month and the beginning of this one. This month's gains were led by healthcare and social assistance, food services, government and construction. At time of writing the US treasury remained well bid.