US Job Creation Figure For February Weak
The US Department of Labor publishes the so-called non-farm job creation data on a monthly basis. It has long been seen as one of a number of bellwether indicators for the health of the US economy. Strong job creation figures are taken to mean that the economy is robust whereas figures below the number of jobs created for the workforce to stand still suggests weakness. The economy needs to add approximately 150000 new jobs every month to meet demands coming from young people and migrants entering the job market – it is a net figure, accounting for workers who retire or die.
The February job creation total was strongly down on the January figure, coming in at just 20000 new jobs created, compared to last month’s figure of 311000. The February figure is the weakest result since September 2017, but that month’s job creation figures were curtailed by two hurricanes (Irma and Harvey, if you keep a track on such things). The value fell dramatically short of expectations which predicted that 180000 new jobs would be created. There are suspicions that the January figure (and the February prediction) was artificially high since some government workers who were affected by the partial closure of the Federal government, took on second jobs to make ends meet. Indeed, a statement by The US Bureau of Labor Statistics noted: "This decline reflects, in part, the return of federal workers who were furloughed in January due to the partial government shutdown."
On a brighter note, wages increased by 3.4% for the year to February, up from 3.1% for the comparable period in January. Perversely, unemployment also dropped in February to 3.8%, down from 4% the previous month.
A detailed look at the jobs data shows that the construction sector was hard hit with some 31000 jobs being lost, compared to a gain of 53000 in January.
Opinion is divided as to whether the February data is a portent of a slowing economy or a blip in an otherwise (relatively) strong one. It will take a few more months’ worth of data before the trend is clear. However, some analysts are already suggesting that the decline will mean that the Federal Reserve will keep rates on hold for longer than currently anticipated.