UBS On-Air: Market Moves Top of the Morning: U.S. labor market & inflationary environment
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Mar 6, 2026 Andrew Dubinsky, Senior U.S. Economist at UBS CIO, provides concise macro analysis. He breaks down February’s softer-than-expected jobs data and why a single weak month may mislead. He explains the low-hire, low-fire labor dynamic, GDP and hiring outlook, and previews an anticipated step down in core inflation with differing goods versus services trends.
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February Jobs Report Showed Noticeable Softness
- February payrolls were softer than expected with over 90,000 private jobs lost versus expectations of +50k to +60k.
- A three-month average for private payrolls fell to about 18,000 per month, near the break-even pace to keep unemployment stable.
Smooth Monthly Noise With Three Month Averages
- Single-month volatility matters less; use a three-month smoothing to assess trend and avoid overreacting to payback from a strong January.
- Jobless claims and other indicators do not show broad layoffs, suggesting contained downside risk.
Low Hire Low Fire Labor Market Dynamic
- Labor market is 'low-hire, low-fire' with flows roughly netting to a stable or slowly declining unemployment rate.
- Lower immigration and demographics mean future monthly job gains will be lower, possibly around 50,000.