The February jobs report reflected much better than expected job gains and an unemployment rate back at a 50-year low, before the coronavirus outbreak escalated and threatened to weigh on economic activity.
The Labor Department released its February jobs report at 8:30 a.m. ET Friday. Here were the main results from the report, compared to consensus expectations compiled by Bloomberg:
Change in non-farm payrolls: +273,000 vs. +175,000 expected and 273,000 in January
Unemployment rate: 3.5% vs. 3.6% expected and 3.6% in January
Avg. hourly earnings, month on month: +0.3% vs. +0.3% expected and +0.2% in January
Avg. hourly earnings, year on year: 3.0% vs. +3.0% expected and 3.1% in January
January’s job gains were upwardly revised to 273,000, from the 225,000 previously reported, and December’s non-farm payroll additions were upwardly revised by 37,000 to 184,000. This brought average job gains over the past three months up to 243,000, or above the average from 2019, when job growth averaged 178,000 per month.
The services sector again led the advance in job gains in February. Within this sector, health-care and social assistance added 56,500 payrolls, accelerating gains from January. Professional and business services also posted strong job gains, adding a net 41,000 positions.
Within the services sector, wholesale trade, retail trade, transportation and warehousing and temporary health services shed jobs in February. Retail posted the largest declines, losing a net 7,000 positions and extending a drop of 5,800 from January.
For the goods-producing sector, manufacturing added jobs for the first time in three months, posting a net 15,000 payroll gains. Construction and mining each also added jobs, underscoring a firming of the goods-producing sector in February after months of weakness relative to services. Employment in construction rose by 42,000 positions for the month after a gain of 49,000 in January, representing the best two-month advance for the industry since March 2018, as unseasonably warm weather and a strengthening housing market helped supported hiring.
Government employees increased by 45,000 in February, reflecting in part 7,000 new temporary workers added for the 2020 Census, the Department of Labor said.
Meanwhile, the unemployment rate ticked back down to 3.5% in February, matching the 50-year low also achieved in December. The labor force participation rate held at 63.4%, close to the highest level since mid-2013 and indicating a solid proportion of the working age population employed or actively seeking employment.
The February jobs report, however, reflected the state of the labor market before the coronavirus outbreak broadened out. The reference week for the Labor Department’s household survey, which includes the unemployment rate, takes place during the week of the 12th of the month, while the establishment survey tracking non-farm payroll changes measures the pay period including the 12th.
The first known deaths linked to the coronavirus in the U.S. took place last week. The number of new confirmed cases in the U.S. began to accelerate in late February, coinciding with a rise in global new cases and sparking fears of a pandemic that would dent company supply chains, consumer demand, and ultimately threatened to stunt economic growth worldwide.
So far, domestic economic data reports have mentioned the coronavirus mostly as an impending downside risk, with impacts from the outbreak yet to meaningfully appear. The February jobs data was expected to be another backward-looking report.
The report, however, reaffirmed the U.S. economy’s momentum at the start of the year, in absence of a major escalation of the outbreak.
“It is a good thing, not a bad thing that the U.S. economy ran into the coronavirus on strong footing,” Neil Dutta, head of economics at Renaissance Macro Research, said in an email Friday. “Yes, this was stale. But the economy is dealing with this from a position of strength.”
Ahead of the official February jobs report, other reports also underscored the strength of the U.S. labor market at the start of the year. In its Beige Book released Wednesday, the Federal Reserve characterized economic activity through February 24 as expanding at a “modest to moderate rate over the past several weeks,” with employment increasing “at a slight to moderate pace, overall, with hiring constrained by a tight labor market.”
ADP/Moody’s reported Wednesday that private payrolls increased by 183,000 in February, retreating slightly after January’s gain of 209,000 but topping consensus economist expectations.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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