The breakneck pace of hiring slumped in February, a sign that U.S. growth is cooling, though strong wage growth and earlier robust job gains suggest the economy’s near decadelong expansion will endure.
Sarah Chaney of The Wall Street Journal had the news:
U.S. nonfarm payrolls rose a seasonally adjusted 20,000 in February, the Labor Department said Friday, marking the slowest pace for job growth since September 2017—when hurricanes skewed hiring patterns—and falling well below economists’ expectations for 180,000 new jobs.
Some of February’s weak job growth might have been a response to strong hiring in previous months. Payrolls grew 311,000 in January and 227,000 in December. The three-month average for job gains clocked in at 186,000, near the average for much of the expansion.
The unemployment rate dropped to 3.8% in February from 4% the month before, returning to a level last seen in October. Wages grew at the fastest pace in nearly a decade.
For months, strong U.S. job growth has been a counterpoint to other economic disturbances, including a partial federal-government shutdown in late December and January, a sputtering U.S. housing sector and a global economic slowdown.
Paul Davidson of USA Today reported that wages grew in February:
Average hourly earnings rose 11 cents to $27.66, pushing up the annual gain from 3.2 percent to 3.4 percent, highest since April 2009.
Pay increases have accelerated as employers bid up to draw a shrinking pool of available workers amid a historically low unemployment rate. Average wage growth is expected to reach 3.5 percent by the end of the year, an advance that could spark faster inflation and prod the Federal Reserve to raise interest rates more rapidly. For now, Fed officials recently said they will be patient on rate hikes as they assess the fallout from the slowing global economy and volatile financial markets.
Industries that are hiring
Professional and business services led the meager job gains with 42,000. Healthcare added 22,000 jobs; and manufacturing, which is grappling with the slower overseas economy and trade war, added just 4,000. Employment fell by 31,000 in construction and 6,000 in retail and was unchanged in leisure and hospitality – signs that bad weather suppressed payrolls last month.
Jeff Cox of CNBC.com reported that the job growth was the worst since September 2017:
It was the worst month for job creation since September 2017, when two major hurricanes hit the employment market, offset somewhat by a solid increase in wages.
The month fell short of the relatively modest expectations of 180,000 from economists surveyed by Dow Jones. The unemployment rate had been projected at 3.9 percent from January’s 4 percent.
“I think it’s a very fluky number,” Larry Kudlow, director of the National Economic Council under President Donald Trump, told CNBC in a “Squawk on the Street” interview.
