Job creation exceeded expectations in February, but the unemployment rate rose and job growth in the first two months was not as strong as initially reported.
The U.S. Department of Labor reported on Friday that nonfarm payroll employment increased by 275,000 this month and the unemployment rate rose to 3.9%. Economists polled by Dow Jones had expected job growth of 198,000, a slowdown from January’s downwardly revised 229,000 gain. December’s increase was also revised down to 290,000 from 333,000.
Although the labor force participation rate held steady at 62.5%, the unemployment rate continued to rise.
Average hourly earnings, closely watched as a gauge of inflation, showed growth this month was slightly less than expected and slower than a year earlier. Wages rose just 0.1% this month, one-tenth of a percentage point lower than expected, and were up 4.3% annually, down from January’s 4.5% increase and slightly below expectations of 4.4%.
The market showed little reaction to the news, with futures trading flat with the major moving averages. However, Treasury yields fell sharply.
“It actually provides a data point for their various views,” Liz Ann Sonders, chief investment strategist at Charles Schwab, said of the report.
Job creation is skewed toward part-time positions. According to the household survey, full-time jobs fell by 187,000, while part-time jobs increased by 51,000. The data, used to calculate the unemployment rate, show total employment fell by 184,000.
From an industry perspective, healthcare led the way, adding 67,000 new jobs. The government was again a significant contributor, providing 52,000 people, with restaurants and bars adding 42,000 and social assistance adding 24,000. Other industries with gains included construction (23,000), transportation and warehousing (20,000) and retail (19,000).
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