February 1, 2019 8:15 a.m. Jobs Surprise to the Upside -by-Lester Murray

The Bureau of Labor Statistics reported this morning that the Unemployment Rate rose in January to 4% from 3.9%, and that may be the best economic news that markets have received all week. A rise in the Labor Force Participation Rate to 63.2% from 63.1% is the latest improvement in a positive trend.  In last January's report, the LFPR was just 62.7%. This means that more people are entering the labor force and that's a good thing. Similarly, the Employment/Population Ratio was 60.2% one year ago and this morning's increase of .01% brought that measure to 60.7%.

The 304k rise in Non-Farm Payrolls far exceeded the experts' estimates of 165k, while last month's barn-burner 312k was revised to just 222k.  The year-over-year growth rate in Average Hourly Earnings remained unchanged at 3.2%.  As one might expect, the report will be interpreted as an economic positive and bond prices are slipping just a bit. A few ticks here and there with the Ten Year at 2.65% and the Two-Year a nudge below 2.50%. To repeat a cautionary note, some distortion often occurs as annual baseline data revisions are included and add to that, the tough-to-quantify effects of the shutdown make difficult measurements even more so.