The February jobs report: what you need to know
Following a robust January, the economy maintained its momentum in February. According to the latest release of the U.S. Bureau of Labor Statistics’ monthly jobs report, 273,000 jobs were added last month. Meanwhile, the unemployment rate reverted to 3.5%, and average hourly earnings increased by 9 cents, totaling $28.52. Here are the headlines from February’s report.
Strong Job Growth Continues into February
According to the BLS report, 273,000 jobs were created in February, nearly double Wall Street estimates that hovered around 175,000. But the great job news doesn’t stop there. It turns out that revisions to the two previous job reports revealed there were 85,000 more jobs than originally reported. With these revisions, job gains have averaged 243,000 over the last three months.
Health care and social assistance led the strong job growth last month, with an increase of 57,000 jobs seen primarily in individual and family services, physician offices, home health care services, and hospitals. Employment in food services and drinking places (53,000), construction (42,000), tech (32,000), and finance (26,000) also saw significant gains in February. It’s important to note, too, that government employment increased by 45,000, which was partly due to the hiring of 2020 Census workers (7,000), but also due to a gain in state government education (16,000).
Coronavirus Likely Hasn’t Affected U.S. Labor Market
As you might have guessed due to the high spirits report, the Wall Street Journal says that the coronavirus outbreak likely didn’t affect the U.S. job market in February. The mid-month reference point that the BLS uses to calculate the monthly jobs report fell just before the virus became such a growing concern in the U.S. However, economists are saying that the virus may impact hiring in future months. Pantheon Macroeconomics Chief Economist Ian Shepherdson told the New York Times that the value of this report is that “it gives us kind of a benchmark of where we were before things began to go wrong.” The Times goes on to say that we should expect to see a clearer picture of the impact on the labor market in travel, entertainment, and food service industries over the next couple of months.
Fewer Unemployment Claims and Layoffs Amid Strong Job Growth
Over the past six months, the unemployment rate has gone back and forth between 3.6% and 3.5%. And that’s exactly what it did in February, reverting back down to 3.5% last month. Meanwhile, the number of Americans filing for unemployment benefits fell last week. According to the latest reading by the U.S. Department of Labor, initial jobless claims dropped by 3,000 to 216,000, another indicator that the economic damage from the coronavirus is still in the early stages and hasn’t caused companies to lay off any workers. This is reinforced by job placement firm Challenger, Gray & Christmas, which also reported that planned layoffs fell 16.4% from January’s total of 67,735 to 56,660 in February.
Wage Growth Remains Mediocre at Best
Wages continued to tick up, increasing by 9 cents in February. Now totaling $28.52 in average hourly earnings, wage growth increased to 3% for the year. In one manner of speaking, this pay growth marks an improvement over just a couple of years ago in 2018 when wages were growing at an even slower pace. However, due to the record-low unemployment rate, one could argue that wages should be increasing more to appease the demands of a tightening labor market. The Wall Street Journal says that the increase of people entering the labor market is one of the factors holding wage growth down, “as workers coming from outside the labor force tend to command less pay than hires moving from other jobs.”
The next jobs report will be released on April 3, 2020, at 8:30 a.m. EST. In the meantime, see how Monster can help drive job growth at your organization.