Employers add better-than-expected 242,000 jobs in February273 views
Employers added 242,000 jobs in February as the labor market bounced back from a short-lived slowdown and provided further evidence that it’s shrugging off global economic troubles and market turbulence.
The unemployment rate was unchanged at 4.9%, the Labor Department said Friday.
Economists surveyed by Bloomberg expected 195,000 job gains, according to their median forecast.
Also encouraging is that job gains for December and January were revised up by a total 30,000.December’s was revised to 271,000 from 262,000, and January’s, to 172,000 from 151,000.
But average hourly wages fell 3 cents to 25.35 after rising sharply in January, and are up 2.2% the past year, raising concerns that a recent pickup to 2.5% is not being sustained. The Federal Reserve is seeking signs that tepid wage gains of just over 2% for most of the recovery are accelerating. That would help push meager inflation towards the Fed’s annual 2% target.
Also of some concern is that the average workweek fell to 34.4 hours from 34.6 hours. And the number of temporary workers dropped by 10,000 and was down for the second straight month. Those could be signs that hiring may slow in coming months since employers typically adjust the hours of existing workers and bring on or lay off temporary employees before adding permanent staffers.
Businesses added 230,000 jobs, led by health care, retail and restaurants. Federal, state and local governments added 12,000.
In a positive sign, a broader measure of joblessness that includes part-time employees who prefer full-time jobs and discouraged workers who have given up looking, as well as the unemployed, fell to 9.7% from 9.9%.
Although job growth slowed in January, economists largely blamed payback for blockbuster average gains of 279,000 in the fourth quarter that were likely inflated by unseasonably warm weather.
A second straight disappointing performance in February would stoke worries that manufacturers’ struggles were finally restraining the healthy service sector and labor market. Weakness abroad, especially in China, and a strong dollar have clobbered factory exports while low oil prices have dampened energy investment and related production.
This week, an index of February service-sector activity revealed continued growth but its measure of employment fell into contraction territory.
At the same time, payroll processor ADP reported a solid gain of 214,000 private-sector jobs last month. Initial jobless claims, a reliable barometer of layoffs, have remained at low levels. And recent reports showed strong advances in household consumption and construction spending. Even an index of manufacturing activity posted a less severe contraction.
Regardless of the strength of Friday’s employment report, most economists don’t expect the Federal Reserve to raise its key interest rate this month after lifting it in December for the first time in nine years. The overseas strains and oil crash have shaken financial markets, and Fed policymakers have said they want to assess those effects on the economy. Stocks have rallied from a sell-off earlier in the year, but corporate borrowing costs remain elevated compared to last year, reflecting lingering jitters about the economy.
Follow Paul Davidson on Twitter @PDavidsonusat.