Holy cow, what a drop off. The February jobs report shows the economy only added 20,000 jobs last month. Experts predicted 180,000 jobs.
However, the unemployment rate fell to 3.8%.
From The Wall Street Journal:
Some of the pullback in February hiring was likely payback after back-to-back months of strong job gains. Revised figures show employers added 311,000 jobs in January and 227,000 in December, a net upward revision of 12,000.
A tighter labor market, in theory, should also translate into faster wage growth, as employers compete for scarce labor. Friday’s report showed that is materializing: Wages rose 3.4% from a year earlier in February, a pace last matched in April 2009.
Average hourly earnings for all private-sector workers increased 11 cents last month to $27.66.
Business-services glowed in the jobs report as that sector added 42,000 jobs. The healthcare profession added 21,000. Construction jobs took a hit since it only added 31,000 jobs.
According to CNBC, “leisure and hospitality, a key component of the recovery, was flat for the month.”
Let’s look at unemployment, which has various measures. The broadest measure that fell the most was part-time workers looking for full-time work from 8.1% in January to 7.3% in February. This could be because of the partial government shutdown in January.
As the economy improved, those with different educational levels began to close. In February, the unemployment rate for those without a high school diploma dropped to 5.3%. Those without the diploma or a college degree “continue to face significantly higher unemployment rates than those with degrees.” In other words, stay in school!
The unemployment rate for black men climbed in February to 7.2%. It was at 5.8% in November. Unemployment for other races continued to declined in February.
Wage growth is one of the bright spots in the jobs report as it went up 3.4% from a year ago, which is “the fastest pace since April 2009.” Since inflation has slowed down, “real wage gains are now increasing once again.” From The Wall Street Journal:
Yes, the 20,000 figure was a big miss. But Robert Frick, corporate economist at Navy Federal Credit Union, points out that the overall trend still looks solid.
“The average for the last several months still reflects jobs are being added at a strong 180,000 per month rate. And more importantly, wage growth was the highest of the expansion with average earnings for private workers up 0.4% month over month, showing American workers are starting to collect more of the gains of the expansion,” Mr. Frick said in an email.
This could change next month as the numbers usually do:
Analysts are scratching their heads over February’s job’s growth number, questioning whether the government shutdown earlier this year or a major snowstorm somehow altered the numbers.
“You can say this is not consistent with what we’ve seen from earnings,” said Tony Roth, CIO of Wilmington Trust.
Despite the headline jobs number miss, unemployment ticked lower and wages rose to their strongest pace in nearly a decade.
“We expect the number to be revised upwards. It’s a headline number, an anomaly,” Mr. Roth added.
The jobs report added revisions to December and January by 12,000. December actually added 227,000 jobs while January added 311,000.
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