February Jobs Report Weakest in 30 Months

Andrew Cummings
March 10, 2019

The data present a mixed bag for the Federal Reserve, which has said it will hold off on additional rate increases amid signs economic growth is moderating and the absence of inflation. Retailers cut 6,100. Job growth in a category that includes mostly restaurants and hotels were unchanged last month after a huge 89,000 gain in January. Hiring has been consistent in the last quarter. "I think the big news really was that wages went up and that's great for the American worker".

US stocks fell when trading opened, continuing a weeklong slide. The dollar dropped against a basket of currencies.

Addressing reporters outside the White House later, Trump said the number of new jobs "averages out" with the report's positive information.

The unemployment rate fell to 3.8% as fewer unemployed people were looking for work.

The longest shutdown in USA history ended on January 25. "The fact that our labor force grew a year ago by 109,500 shows that even with such a low unemployment rate, MA continues to attract additional workers into our labor pool to help grow our economy", said Labor and Workforce Development Secretary Rosalin Acosta. The decline in the so-called U6 rate was the largest since the BLS launched the series in 1994.

Average earnings in February were 3.4 percent higher than a year earlier, growing to $27.66 per hour. That raised the annual increase in wages to 3.4 per cent, the biggest gain since April 2009, from 3.1 per cent in January.

"Despite the slowdown, job growth remains strong enough for the labor market to continue tightening and put upward pressure on wages". A report on Thursday showed labor costs rising only 1.4 percent in 2018, the smallest gain since 2016, after increasing 2.2 percent in 2017. They, however, say that source of labor supply is dwindling.

Meanwhile, average hourly wages rose 11 cents for the month to $27.66, putting them up 3.4 percent over the same month past year - more than twice as fast as inflation.

Goldman Sachs economist Jan Hatzius also expects February's report to show that the labor market cooled substantially. The leisure and hospitality sector added no jobs after payrolls increased by 89,000 in January.

Healthcare added 21,000 and wholesale trade went up 11,000.

Other Services added 500 (+0.4%) jobs over the month. Economists widely suspect a slowdown will hit the USA economy soon, according to WSJ. The economy added 260,000 jobs the following month.

Manufacturing jobs level remained unchanged over the month.

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