US economy adds only 20,000 jobs in February; unemployment falls to 3.8 percent
Friday, March 08, 2019
The federal government’s February jobs report shows that payroll employment rose 20,000 last month, a sharp departure from the 311,000 new jobs added in January, according to the Bureau of Labor Statistics. February’s unemployment rate of 3.8 percent compared favorably with 4.0 percent in January.
"One month does not make a trend," says Elise Gould, an economist at the Economic Policy Institute in Washington, D.C. On that note, job growth averaged 186,000 over the past three months.
"One reason for the February weakness was harsh weather, depressing job growth in construction, hotels, and restaurants," according to Gould.
In February, jobless rates decreased foradult men (3.5 percent), whites (3.3 percent), and Hispanics (4.3 percent), the BLS reported. The February unemployment rates for adult women (3.4 percent), teenagers (13.4 percent), blacks (7.0 percent), and Asians (3.1 percent) showed scant or no change.
Workers’ paychecks rose in 2018. "Wages grew 3.4 percent over the year, the highest so far in the economic recovery from the Great Recession," according to EPI’s Gould. February marked the 101st straight month of the expansion.
In February, the employment-population ratio (the share of the labor force now on payrolls versus the total working-age population) remained at 60.7 percent. "The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) decreased by 837,000 to 4.3 million in February," the BLS reported. "This decline follows a sharp increase in January that may have resulted from the partial federal government shutdown."
Midsize employers (50-499 employees) dominated with 95,000 new hires in February, up from 84,000 in January,according to the ADP National Employment Report. Large firms (500 or more workers) hired 77,000 new employees in February compared with 66,000 in January. Significantly, small businesses (payrolls of 1-49 employees) hired 12,000 new workers in February, a sharp drop from 63,000 in January. National franchise declined to 24,500 in February from 33,000 in January.
ADP’s National Employment Report aggregates the U.S.’ nonfarm private sector employment from existing payroll data, according to the ADP Research Institute working with Moody’s Analytics. ADP reports payroll data for 411,000 American private-sector clients employing about 24 million workers nationwide. (The BLS surveys businesses and households and counts government jobs.)
According to ADP’s report, the service-providing sector added 139,000 jobs in February, a drop from 145,000 in January.Professional and business services employment led the way with 49,000 in February, an increase from 46,000 in January. In February, trade, transportation and utilities employers hired 14,000 new workers versus 13,000 in January. Education and health firms added 37,000 new hires in February nearly matching 38,000 new jobs in January.
Payrolls in the goods-producing sector grew by 44,000 jobs in February, a steep drop versus February’s 68,000 new hires. Manufacturing enterprises added 17,000 new workers in February, a fall of nearly half from 33,000 new workers in January. Construction companies’ payrolls grew by 25,000 hires in February, a loss of 10,000 jobs compared with the employment of 35,000 new workers in January.
"We saw a modest slowdown in job growth this month," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement. "Midsized companies have been the strongest performer for the past year. There was a sharp decline in small business growth as these firms continue to struggle with offering competitive wages and benefits."
Mark Zandi is the chief economist of Moody’s Analytics. "The economy has throttled back and so too has job growth," he said. "The job slowdown is clearest in the retail and travel industries, and at smaller companies. Job gains are still strong, but they have likely seen their high watermark for this expansion."
Meanwhile, Robert E. Scott faults President Trump for his economic policies. "The U.S. Census Bureau reported that the U.S. goods trade deficit reached a record of $891.3 billion in 2018, an increase of $83.8 billion (10.4 percent)," according to Scott, a senior economist and director of trade and manufacturing policy research at the EPI. “The broader goods and services deficit reached $621.0 billion in 2018, an increase of $68.8 billion (12.5 percent).
"The rapid growth of U.S. trade deficits reflect the failure of Trump administration trade policies, as well as the negative impacts of tax cuts and spending increases, which have sharply increased the federal budget deficit, and tightening of U.S. monetary policy, resulting in upward pressure on interest rates and the real value of the dollar."
In other words, the global competitiveness of the U.S. economy weakened.
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