US payroll growth surges in February, unemployment falls
|- Non-farm payrolls added 273,000 workers far more than the 175,000 forecast.
- Prior months revised higher by 85,000, three month average 243,000.
- Wages rise 3%, unemployment rate falls to 3.5%.
American firms continued their hiring wave in February even as the economic impact of the Coronavirus began to dominate headlines and markets.
Non-farm payrolls rose 273,000 last month as the U-3 unemployment rate dropped to 3.5% equaling its lowest level in half a century, reported the Labor Department on Friday. December and January job figures were revised higher by 85,000 bringing the three month average to an impressive 243,000. Economists had predicted 175,000 new positions in February.
Non-Farm Payrolls
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An alternative unemployment measure the U-6 or underemployment rate, which has a more expansive definition, rose to 7% from 6.9%.
Weekly hours, which can rise in a tight labor market and help boost productivity, edged up to 34.4. Average hourly earnings were 3 % higher on the year as expected and have now gained 3% or more for 17 straight months. The labor force participation rate was unchanged at 63.4%.
Job gains were widespread with health care leading at 57,000 followed by food service at 53,000. Construction trades added 42,000 partially due to the mild weather. Government payrolls rose by 45,000 largely due to hiring for the 2020 Census.
Hiring decisions for February were largely taken before the Coronavirus scare struck so hard at financial markets.
In general US economic statistics have been strong through the first two months of the year. Purchasing managers’ indexes from the institute for Supply Management showed improved outlook and rising inclinations to hire. Jobless claims continue near their five decade lows and the job search firm Challenger, Gray and Christmas noted on Thursday that planned layoffs fell 16% from January to February.
Consumer sentiment in February has also remained strong in the Michigan and Conference Board Surveys. The preliminary reading for March from Michigan will be released on Friday March 13th. It is forecast to fall to 97 from 101 in February.
Michigan Consumer Sentiment
Consumption in the all-important consumer sector was healthy through January. February retail sales figures will be issued by the Census Bureau on March 17.
Financial and equity markets have taken a severe pummeling in the last two weeks as the uncertainties surrounding the economic impact of the Coronavirus rise and defensive measures have ruled trading and financial considerations.
How the market turmoil will affect the consumer and the spending decisions that support two-thirds of US economic activity is the great unknown.
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