Lower- and middle-income workers were the big winners in Friday's jobs report

The February jobs report crushed it.

Data out Friday from the Bureau of Labour Statistics showed that nonfarm payrolls grew by 242,000.; economists had estimated a gain of 195,000.

Additionally, the unemployment rate held steady at 4.9%, an eight-year low and the U-6 unemployment rate, which adds those who are working part time for economic reasons, fell to 9.7% from 9.9%.

But there was another key positive from the report, as highlighted in the chart below which comes to us from Deutsche Bank’s Torsten Sløk: the recovery is broadening out to include more and more low- and middle-income jobs.

Importantly, “this is good news for consumer spending because the marginal propensity to consume is higher for low and middle income households,” wrote Sløk in a note to clients after the jobs report.

Overall, Sløk added, this report shows “
that this recovery is moving steadily forward.”
“The conclusion is that the pessimists have to wait for a much bigger shock because what we saw in January and February was clearly not enough to slow down the US economy,” he wrote.

“In other words, the bears should look ahead and ask themselves the following question: If the tightening in financial conditions in markets in January and February combined with the slowdown in growth in China and EM and Europe is not enough to slow down the US economy, what is?”

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