311,000 jobs were created in the United States last month, but wage gains decelerated and the unemployment rate jumped as more people entered the workforce – making a half percentage-point hike at the March Federal Reserve meeting marginally less likely. According to data released by the Bureau of Labor Statistics this morning, the unemployment rate climbed to 3.6 percent in February, and the participation rate moved up to 62.5 percent from 62.4 in the prior month, indicating that some workers are coming off the sidelines. The previous two payroll prints were revised down by a combined 34,000.

Average hourly earnings rose 4.6 percent year-over-year, slower than expected, but still well beyond levels that would suggest inflation risks have receded.

Ahead of the release, investors were positioned for a 225,000-job gain, with the unemployment rate seen holding at 3.4 percent.

The dollar slipped on the release as yields fell across the front end of the curve. Odds on a 50 basis point hike at the Fed’s March meeting tumbled slightly from coin-toss levels ahead of the print, and equity futures turned green.

Two-year yields are on course for the biggest two-day drop since 2008, but we suspect the ongoing turmoil in the financial sector and today’s data aren’t quite sufficient to change minds on the Fed’s rate-setting committee. For that, a surprise in Tuesday’s inflation print could prove necessary.

Canada generated 21,500 jobs in February, again beating expectations for a 10,000-position increase. In this morning’s (unfortunately simultaneous) update, Statistics Canada said the unemployment rate held at 5 percent in February.

Perhaps most importantly, average hourly wages for permanent employees climbed 5.4 percent on a year-over-year basis, accelerating to a pace last recorded in November. This will help reinforce odds on at least one more 25 basis point hike in the Bank of Canada’s tightening cycle, and are helping propel the Canadian dollar higher against the dollar and other majors as we go to pixels.