WHAT YOU NEED TO KNOW:
- U.S. employers added 313,000 jobs in February but unemployment rate remained the same at 4.1% for 17-years, the Labor Department said Friday.
- Bloomberg surveyed economists sating they had expected 205,000 job gains.
- Goldman Sachs economists predicted that varying climate and weather conditions can help boost employment, especially in industries like retail, construction, and restaurants.
There was a jump in the average hourly earnings in January, an increase of 4 cents to $26.75. But that slowed the annual increase to 2.6% from January’s 2.9%. The decrease indicates that January’s large growth was abnormal. The reason was a sudden decline in average weekly hours brought about by unforgiving weather and a bad flu season. The usual work week edged back up in February to 34.5 hours.
“The surge in payrolls was likely exaggerated by weather effects,” says Jim O’Sullivan, chief U.S. economist of High Frequency Economics.
January’s increase was the biggest in almost nine years. It looked like the low jobless rate and increasing competition among employers for lesser number of workers was leading to stronger wage growth.
Wage increases slowed because 806,000 Americans joined the labor force, and that includes people working and looking for jobs. It may be healthy for the economy, but it restricts pay raises because it gives employers a bigger pool of job candidates.
There’s a sudden increase in the number of Americans over 16 working or hunting for jobs. The bigger labor force made unemployment rate constant despite flourishing job gains.
Leading the payroll gains is construction with 61,000 indicating that warm temperatures was a main factor reinforcing employment.
Despite retailers losing employees due to more people shopping online, it added 50,000, another indication that warm weather may have drawn shoppers to the malls.
There are 50,000 additional jobs in professional and business services while 23,000 for education and health care, and 31,000 jobs added to manufacturers.
The 313,000 additional jobs was the largest since July 2016. Wage growth may slowed down, but it still increased to 2.6% annually, which is more than the 2.5% rate of the past two years.
Source: USA Today