March 8 (Reuters) - U.S. job growth accelerated in February, but a rise in the unemployment rate and moderation in wage gains kept on the table an anticipated interest rate cut in June from the Federal Reserve.

Nonfarm payrolls increased by 275,000 jobs last month, the labor Department said on Friday. Data for January was revised down to show 229,000 jobs created instead of 353,000 as previously reported. Economists polled by Reuters had forecast 200,000 jobs added.

MARKET REACTION:

STOCKS: S&P 500 e-mini futures pointing to higher opening on Wall Street.

BONDS: The U.S. Treasury 10-year yield fell to 4.074%. U.S. two-year yields slid to 4.450%

FOREX: The dollar index fell 0.2% to 102.57.

COMMENTS:

JAMIE NIVEN, SENOR FUND MANAGER, CANDRIAM, LONDON

"I think (bond markets rallied) primarily on the revisions element. I guess the big concern was that we were seeing a reacceleration in both economy and inflation in January, that was somewhat kicked off by the NFP numbers in January. So to see that being, let's be honest, revised quite substantially downwards is probably a relief for the market. So I think that element is certainly a positive, hence why we're seeing particularly the front end rallying... And also the average hourly earnings (coming in lower). That's very important, because that talks to the inflation concern."

"But it is mixed... The headline number (was high) and I think if you look over the last four months, it's still almost a million jobs in four months. So it's still a pretty robust U.S. economy... I don't think it's a turning point."

BILL STERLING, GLOBAL STRATEGIST, GW&K INVESTMENT MANAGEMENT, WINTER PARK, FLORIDA

"Despite the shocking print of 275,00 versus 200,000 expected, they revised down both December and January pretty substantially, 167,000 lower than previously reported."

"The initial impression was a big strong report, but when you look under the hood it was not that different from expectations and basically not a challenge to the Fed."

"I don't think it changes perceptions much from prior to the report about when the Fed might cut rates. Then with the uptick in unemployment to 3.9% and also average hourly earnings being up just one-tenth of a percent, it's a relatively dovish number."

LINDSEY BELL, CHIEF STRATEGIST, 248 VENTURES, CHARLOTTE, NORTH CAROLINA

"It's a good report .. where there was a little uncertainty was the bump up in unemployment. That's a little concerning. It's significantly higher than the lows in the cycle. That's one thing we want to watch. But what was a relief for Fed watchers was that hourly earnings returned to a more normal spot."

"It really kind of solidifies what Chair Powell was saying this week, about the confidence he had in the potential to begin the rate cutting cycle this year. So the market should be pleased with this report."

"The economy's doing fine. Its slowing in an orderly manner, not too quickly. Its doing what the Fed needs."

LINDSAY ROSNER, HEAD OF MULTI-SECTOR FIXED INCOME INVESTING, GOLDMAN SACHS ASSET MANAGEMENT, NEW YORK

"As markets have generally been in 'more jobs, less cuts' mode, today's number pumped the breaks on that mantra. The more reasonable, albeit still strong, February print coupled with the two-month payroll net revision spoke to the larger theme of a tight-but-normalizing labor market and an environment that can lend marginally more confidence to the Fed who is looking to shore up their own … Big picture: these were helpful numbers for the Fed to gain confidence. Let's see what happens with the SEP dots."

DON MONTANARO, PRESIDENT, FIRSTRADE SECURITIES, FLORIDA

"We just have super healthy economy here. I really think moving too soon with an interest rate drop is potentially dangerous, and these are at most mixed signals we got here, with the unemployment ticking up a bit."

"I see reasons for caution if I'm the Fed. It would be interesting to see the CPI number that will come out on Tuesday and then of course what the Fed says later on this month. But to me, there's much more risk to cutting rates than there are to leaving them alone right now."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT

"The immediate takeaway is the focus on the unemployment rate going from 3.7% to 3.9%. More unemployment rate implies that the economy is slowing, which would, in the markets' view hopefully, necessitate a rate cut sooner rather than later. The figures revised downwards along with the unemployment rate is probably fueling a little bit of a rebound in the futures."

PAUL NOLTE, SENIOR WEALTH ADVISER, MURPHY & SYLVEST, CHICAGO "The key here is the wage growth than anything else, which came in very modest and well below expectations. This feeds more into the inflation narrative than the strong jobs data. However, the job market data still shows a relatively strong labor force."

"I don't think the data really means much to the Fed. They're much more focused on the inflation data and the fact that wage growth was modest is helpful, but that's the only part of the jobs data that I think the Fed is looking at."

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK

"The bottom line is this was a little bit hotter than we were looking for in terms of nonfarm and hourly wages as well, but if you look at the revisions, I think that is basically pointing to a less robust outlook going forward. That's probably why we're seeing the markets not negatively reacting."

https://www.reuters.com/markets/us/view-feb-us-payrolls-show-labor-market-healthy-not-overly-tight-2024-03-08/