US NFP: Fed still on track for a June rate hike - Wells Fargo

According to analysts from Wells Fargo, the disappointment in job gains was because or retail trade restructuring and some weather effects. They consider wage gains consistent with labor productivity and inflation trends. They see the FOMC on track for a June rate hike. 

Key Quotes: 

“Nonfarm payrolls rose a disappointing 98,000 in March, lowering the three-month average to 178,000 jobs. Over the past five years, there has been one month of weakness in jobs in the first quarter of the year, and three of those cases came in March.”

“Wages reflect the economic fundamentals of the labor market, and those fundamentals include productivity and inflation. Wages are not “low” arbitrarily as if some evil force keeps wages low."

“Strength in the household survey in March suggests the payroll survey likely exaggerates any weakening in the labor market. The unemployment rate fell to a new cycle low of 4.5 percent. Encouragingly, the decline was driven entirely by more workers finding employment while the participation rate held steady. Broader measures of labor market slack also signaled that the labor market is tightening, with the U-6 unemployment rate, which includes people working part-time for economic reasons, falling to 8.9 percent. With the household survey failing to corroborate the weak payroll numbers, this report does not deter our current expectation for the Fed to hike again in June.”