--- title: "Monday Update: Jobs Report Exceptionally Strong" description: Last week, the employment report blew away expectations. In his Monday update, Commonwealth CIO Brad McMillan reviews the numbers, plus what to expect in the week ahead. image: https://blog.commonwealth.com/hubfs/Brad_Images_IMO_Blog/2017/MarketOutlook_1.jpg --- [![The Independent Market Observer](https://blog.commonwealth.com/hubfs/IMO-Title-1.png "The Independent Market Observer")](https://blog.commonwealth.com/independent-market-observer) [![Commonwealth Financial Network](https://blog.commonwealth.com/hubfs/lockup_citron-1.png "Commonwealth Financial Network")](https://www.commonwealth.com/) - [Home](https://blog.commonwealth.com/independent-market-observer) - [About](https://learn.commonwealth.com/about/) ### ![print this page](https://blog.commonwealth.com/hs-fs/file-1376458285-gif/images/print.gif)Print # [Monday Update: Jobs Report Exceptionally Strong](https://blog.commonwealth.com/independent-market-observer/monday-update-jobs-report-exceptionally-strong) Posted by [Brad McMillan, CFA®, CFP®](https://blog.commonwealth.com/independent-market-observer/author/brad-mcmillan-cfa-caia-mai) Find me on: [LinkedIn](https://www.linkedin.com/in/bradmcmillancfa) [Twitter](https://x.com/BradMcMillanCFA) This entry was posted on Mar 12, 2018, 12:55:11 PM and tagged [In the News](https://blog.commonwealth.com/independent-market-observer/topic/in-the-news) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/monday-update-jobs-report-exceptionally-strong#comments-listing) ![Monday update](https://blog.commonwealth.com/hs-fs/hubfs/Brad_Images_IMO_Blog/2017/MarketOutlook_1.jpg?width=300&name=MarketOutlook_1.jpg "Monday update")There were three major economic reports last week, which gave us a look at the service sector, trade, and—most important—the job market. The week ahead will be a busy one, with five major reports expected. ##### Last week’s news On Monday, the **Institute for Supply Management (ISM) Nonmanufacturing index** was released, which did better than expected. It dropped slightly from 59.9 in January (a 12-year high) to 59.5 for February, against expectations for a drop to 59. While this index has been volatile in recent months, the trend has remained positive. Plus, the forward-looking indicators—new orders and business activity—both increased. As a diffusion index, values above 50 indicate expansion. So, even with the decline, the index still indicates strong growth. The ISM Manufacturing index, released the prior week, showed similar strong growth, and this result indicates business confidence remains strong across the board. On Wednesday, the **international trade report** was much worse than expected. The trade deficit was down from $53.1 billion in December to $56.6 billion in January. This was against an expected slight improvement to $52.6 billion, as imports held steady while exports actually declined. The trade deficit is at a nine-year high, and this report leaves trade as a likely drag on growth for the first quarter. Finally, on Friday, the **employment report** blew away expectations, with job growth of 313,000 in February. This result was up from an already strong January, which was revised up from 200,000 to 239,000. Wage growth ticked down a bit, from 0.3 percent in January to 0.1 percent in February, which calmed market worries about accelerating wage inflation. In any event, the strong January wage growth looks due in large part to the weather, so is likely a normal giveback. Labor demand, as expressed by the average workweek, also rose by more than expected, from 34.3 hours to 34.5 hours. This is the equivalent of hundreds of thousands of jobs. Overall, this is an exceptionally strong report and is another positive signal for continued growth. The final piece of economic news last week was that the White House followed through on the **steel and aluminum tariffs** announced by President Trump. As formally presented, the tariffs were not as comprehensive as had been initially thought, including carve-outs for Canada and Mexico. Markets rallied on both this news and the strong jobs report. ##### What to look forward to We’ll kick things off on Tuesday with the **consumer prices report**. The headline number, which includes food and energy, is expected to drop from a 0.5-percent increase in January to a more modest 0.2-percent increase in February, as surges in energy prices normalize. The annual figure, however, is expected to rise from 2.1 percent to 2.2 percent. Core inflation, which excludes food and energy, is also expected to drop on a monthly basis, from 0.3 percent in January to 0.2 percent in February. The annual figure in this case, though, is expected to stay steady at 1.8 percent. If these numbers come in as expected, they would indicate stable conditions. On Wednesday, the **retail sales report** is expected to show renewed strength. The headline number, including autos, is expected to rise from a 0.3-percent decline in January to a 0.3-percent increase in February, as auto sales bounce back. Core sales, which exclude autos, are expected to improve as well, from a flat result in January to a 0.4-percent increase in February. The boost in take-home pay resulting from the tax bill, along with high consumer confidence, should drive sales higher. On Thursday and Friday, respectively, we get the **National Association of Home Builders (NAHB) industry survey** and the **housing starts report**. The NAHB survey is expected to stay steady at 72, which is a high level, although there may be some downside risk based on supply and labor shortages. After jumping to a 16-year high in January, housing starts are expected to tick down from 1.326 million to 1.286 million, as multifamily construction drops back even as single-family construction continues to rise. These would be healthy reports if they come in as expected. On Friday, the **industrial production report** is expected to improve, with the headline figure rising from a decline of 0.1 percent in January to a gain of 0.3 percent. Manufacturing is expected to show a similar gain, from flat in January to 0.3-percent growth in February. With both oil production and manufacturing showing strength, we could see even faster growth here. Finally, and also on Friday, the **University of Michigan consumer confidence survey** is expected to pull back from 99.7 in February—the second-highest level since 2004—to 99.5 in March on stock market volatility. Here as well, there looks to be upside potential, given faster employment growth and strong results in other confidence surveys. Have a great week! - [Tweet](https://twitter.com/share) ### Subscribe via Email ![TMO_IMO_615x408_sidebar](https://blog.commonwealth.com/hs-fs/hubfs/TMO_IMO_615x408_sidebar.png?width=1033&height=686&name=TMO_IMO_615x408_sidebar.png "TMO_IMO_615x408_sidebar") [Episode 20](https://vimeo.com/1201911815/0f4f028be9?share=copy&fl=sv&fe=ci) June 17, 2026 [Episode 19](https://vimeo.com/1191658257/1b43ce84dd?share=copy&fl=sv&fe=ci) May 13, 2026 [Episode 18](https://vimeo.com/1183174918/e227cf7d80?share=copy&fl=sv&fe=ci) April 15, 2026 [Episode 17](https://vimeo.com/1174554734/636f0f7aba?share=copy&fl=sv&fe=ci) March 18, 2026 [Episode 16](https://vimeo.com/1163757312/bc2f802d74?share=copy&fl=sv&fe=ci) February 11, 2026 [More](https://learn.commonwealth.com/monthly-media-placements) [![Insights_CTA_IMO_233x400-1](https://no-cache.hubspot.com/cta/default/295024/interactive-187935228457.png)](https://blog.commonwealth.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKETDQ2hLOpXdshI1usv4WLLVzpLKRJX9vRYyGRv9%2Btoi1bHWcRvORCZ4fJ7l8%2BkhDZAhPRZ8UFNfIYY26TUCDFdJ0ijEhWaVMLiNuBMOjqc9O7n0xf4%2FPldIajVSfxm5h0ixKr6Zif1oGm8U67721TOFg%2BffsPspC2DwgOJdHRtFCnS%2BZ%2FHBI%3D&webInteractiveContentId=187935228457&portalId=295024) ### Hot Topics Select Category Ask Brad Commentary Economic Risk Factor Updates Economics Lessons Market Thoughts Videos In the News Investing Market Updates On My Bookshelf Politics and the Economy [![New Call-to-action](https://no-cache.hubspot.com/cta/default/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf.png)](https://cta-redirect.hubspot.com/cta/redirect/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf) ### Archives - 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