Economy Adds Disappointing 20K jobs in February; Unemployment Rate Dips

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Number of payroll jobs INCREASED 20,000 in February
  • Unemployment rate in February DIPPED to 3.8 percent from 4.0 percent;
  • Average weekly earnings INCREASED $1.02 in February to $950.48, a 3.1 percent year-year gain;
  • Average hourly earnings GREW 11¢, in February a 3.4 percent annual increase
  • Private sector jobs INCREASED 25,000; Government payrolls FELL 5,000;
  • Prior month job totals were revised up: the number of new jobs in January was revised from 304,000 to 311,000, up 7,000, the number of new jobs in December was revised up by 5,000 to a gain of 227,000;
  • The number of persons unemployed FELL 300,000 to 6.235 million while the number of persons employed INCREASED 255,000; The Labor Force therefore DECLINED 45,000;
  • The number of persons not in the labor force INCREASED 198,000;
  • Labor force participation rate REMAINED at 63.2 percent, up from 63.0 percent a year ago;
  • By sector number of construction jobs FELL 31,000; the number of health-and-education jobs was UP 4,000 compared with the average growth of 45,000 in the previous three months.

Trends:

  • Payroll jobs were up for the 101st straight month
  • Hourly earnings growth has now exceeded 3.0 percent year-year for three straight months, Weekly earnings grew more than 3.0 percent year-year for the fifth straight month;
  • Month-month payroll job growth was the second weakest of the Trump Administration: jobs grew by 18,000 in September 2017 following devastating hurricanes.

Data Source Bureau of Labor Statistics

Image result for employment situation

Beyond the obvious – a disappointing job growth of just 20,000 in February – the Employment Situation included several warning signs for the economy:

  • While earnings growth appeared strong, they were buoyed artificially by weakness in the two lowest paying sectors, retail and leisure-and-hospitality;
  • Early-stage unemployment – fewer than five weeks – represented about 35 percent of all unemployment, up from an average of 34.3 percent in 2018.  The percentage had dropped as low as 28.9 percent two years ago. The increase suggests employment instability.
  • The number of temp and part time jobs grew in February by almost 132,000, the largest month-month increase in four months again suggesting employer reluctance to make permanent full-time staff additions.
  • The drop in the number of construction jobs bolstered concerns about the housing sector: of the 31,000 fewer jobs, 11,000 were in the residential construction sector;
  • The Employment-Population (E-POP) ratio was flat in February at 60.7 and has yet to recover to pre-Recession levels (62.7). E-POP is the broadest measure of employment as a percentage of the working age population and does not factor in those not available for work (i.e. students).
  • The number of credit intermediation jobs – loan underwriters and processors — has fallen 11,000 in the last year as home sales contract.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

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