The Bureau of Labor Statistics reported Friday that the private sector created 25,000 seasonally adjusted new nonfarm jobs in February against a loss 5,000 in the public sector, for a net gain of 20,000, the lowest tally since September 2017. The median forecast of new jobs by analysts surveyed by Bloomberg on Monday was 178,000. Anyone who worked even a single hour during the survey period is considered employed.
Don’t expect Donald Trump to be tweet-chortling this result.
The headline unemployment rate that the BLS labels U3 fell from 4.0 percent to 3.8 percent. Each month the bureau also makes other calculations that cover various cohorts of workers, including one it calls U6 that gauges both unemployment and underemployment. After rising to 8.1 percent last month, it dropped 0.8 points in February to 7.3 percent.
Each month, the BLS revises its tally for the previous two months to take into account more complete labor market data that weren’t available when those reports were issued. Friday’s report revised the January count from 304,000 to 311,000 and December’s count from 222,000 to 227,000.
Once again, the bureau’s count was far different from that of ADP and Moody's Analytics National Employment Report, which release their own estimate of new private job creation two days before the government report comes out. For February, ADP put the count of new private-sector jobs at 183,000, and revised its 213,000 count for January to 300,000.
February marked the 101st consecutive month of job expansion.
Patricia Cohen at the New York Times reported:
“I’ve been in this business over 40 years, and February always presents kind of a pause,” said William H. Stoller, chairman and chief executive of Express Employment Professionals, which is based in Oklahoma City. He compared it to taking a breath during a marathon run, before a second wind kicks in. “I don’t see it hitting the wall at all at this point,” he said.
Diane Swonk, chief economist at the accounting firm Grant Thornton, pointed to several possible reasons for February’s anemic jobs growth. “Manufacturing has been weak, and there was lousy weather across the country,” she said. “That’s still disruptive.”
Some of the layoffs that big retailers have announced may also be starting to trickle through.
In fact, Stoller to the contrary, the past eight Februaries did not present a pause.
The BLS bases its monthly count on the Current Employment Survey of 147,000 business establishments. It derives the unemployment rate from another study, the Current Population Survey of 60,000 households. The final day of the surveys falls around the 12th of each month, which means the data in this month’s jobs report actually measure jobs gained in the last part of January and the first part of February.
Average wages rose in February, and year over year gained 3.4 percent against a core inflation rate of 2.2 percent. Core inflation eliminates energy and food costs. With those included, inflation has been 1.6 percent over the past year.
From Doug Short at Advisory Perspectives, the chart below looks at real, that is, inflation-adjusted hourly earnings using the Consumer Price Index for Urban Consumers. “Theoretically, the CPI is designed to reflect the cost-of-living for metropolitan-area households.”
The chart below takes those real average hourly earnings in the chart above and multiplies them by the hours per week the average worker puts in. By this measure, average weekly earnings are $779 vs the $846 peak in the early 1970s:
Other statistics from Friday’s report:
The civilian workforce fell by 45,000 in February, after falling by 11,000 in January and rising by 419,000 in December. The labor force participation rate remained steady at 63.2 percent in February. The employment-population ratio also remained steady at 60.7 percent.
Unemployment rates differ by race and sex. [Percentages in brackets are for January]. Adult men: 3.5 percent [3.7]; Adult women: 3.4 percent [3.6]; Whites: 3.3 percent [3.5] ; Blacks: 7.0 percent [6.8]; Asians: 3.1 percent [3.1]; Hispanics: 4.3 percent [4.9]; American Indians: Not counted monthly.
• Average hourly earnings of private-sector production and nonsupervisory employees rose in February by 8 cents an hour to $23.18.
• Average hourly earnings for all employees on private non-farm payrolls in February rose 11 cents an hour to $27.66.
• Average work week for all employees on nonfarm payroll fell to 33.6 hours in February.
• The manufacturing work week in February fell 0.1 to 40.7 hours.
February Job Gains and Losses for selected categories:
- Professional services: 42,000
- Temporary help services: 5,800
- Transportation & warehousing: -3,000
- Financial activities: 6,000
- Leisure & hospitality: 0
- Information: 0
- Education and health services: 4,000
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- Health care & social assistance: 22,500
- Retail trade: -6.100
- Construction: -31,000
- Manufacturing: 4,000
- Mining and Logging: -5,000
Here's what the seasonally adjusted job growth numbers have looked like in the previous decade compared with this February’s gain of 20,000 jobs. If you’re nostalgic for the Great Recession, feast your eyes on what Barack Obama faced in his first full month as president in 2009:
February 2009: -742,000
February 2010: - 92,000
February 2011: 213,000
February 2012: 262,000
February 2013: 279,000
February 2014: 168,000
February 2015: 248,000
February 2016: 232,000
February 2017: 141,000
February 2018: 330,000