Job growth ground nearly to a stop last month with the U.S. economy adding the fewest number of workers to payrolls since well over a year ago.
Nonfarm payrolls increased by just 20,000, the worst job creation month since September of 2017, the Bureau of Labor Statistics said Friday.
While fewer new workers joined the workforce, those already there saw their wages go up.
Average hourly earnings for all private nonfarm workers went up 11 cents to $27.66, after a gain of just 2 cents in January. Average hourly earnings have increased 3.4 percent over the year, the best year-over-year increase in several years.
Removing supervisory employees, average hourly earnings for production workers went up 8 cents in February to put the average at $23.18, the BLS said.
Unemployment also continued to fall, to 3.8 percent.
A decrease in construction employment was a big driver of the worse-than-expected news. Employment in professional and business services, health care and wholesale trade, however, continued to trend up, the government said.
The job creation figure was stunning in how far short it fell from what economists had been predicting, with expectations having been the creation of about 180,000 new jobs in February. Estimates of economic performance in the last couple of months have been difficult, however, because of lingering effects from a lack of data collected and disseminated during the government shutdown earlier this year.
But Consider The Weather
Economists also warned that the impact of weather has to be considered.
“Weather-sensitive sectors including construction and leisure/hospitality were hiring no-shows according to the report and seemingly all of a sudden,” noted Bankrate.com senior economist Mark Hamrick. “It is fodder for a reminder that we cannot assume too much about a single monthly report.”
Even with fewer people joining the workforce, the unemployment rate continued to be low by historic standards, and declined even more, dropping 0.2 percentage points to 3.8 percent in the month. The number of out-of-work people also decreased, by 300,000 to 6.2 million.
The jobless rate for Hispanics saw a sharp drop in February, from 4.9 percent in January to 4.3 percent last month. The unemployment rate for white workers also dropped slightly, while African-American unemployment rose slightly.
The figures also saw an expected reversal in January’s spike in the number of people working part-time, but wanting full-time work. That number dropped by more than 800,000, likely reflecting the return of government workers to their full-time jobs after the end of the shut-down.
Bankrate.com’s Hamrick noted the expansion of the last several years wasn’t going to last forever.
"Slowing job growth is to be expected over the coming year, one way or the other,” Hamrick said. “The Fed sees growth for the full year at 2.3 percent, down from the 3 percent-ish pace in 2018. The average among economists surveyed by Bankrate.com suggests 166,000 jobs will be added, on average, per month over the next year."
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