WASHINGTON: The US economy had another strong month of job creation in February, with the manufacturing, health care, mining and construction sectors all adding positions, the Labor Department reported Friday.
The result was sure to boost already high expectations that the central bank will raise its benchmark interest rate next week. The White House also seized on the news as a validation of its economic agenda, though much of this has yet to take shape.
Employers added a net 235,000 new positions last month, well above an analyst forecast and just shy of the 238,000 new positions added in January.
And in another sign that jobs markets are tightening, the already low unemployment rate fell a tenth of a point to 4.7 percent, leaving the unemployed population at 7.5 million.
That decline came even as the labor force participation rate rose to 63 percent, a level not surpassed in almost three years, meaning people who had been on the sidelines, perhaps discouraged from looking for a job, are rejoining the labor market.
With February’s robust job creation and an upward revision to January’s numbers, the world’s largest economy has added an average of 209,000 new jobs over the last three months.
The Federal Reserve has sent strong signals this month that it is likely to hike, absent a negative surprise in economic data. Job creation, unemployment and inflation have all approached the central bank’s targets in recent months.
Ian Shepherdson of Pantheon Macroeconomics said the latest jobs numbers virtually guaranteed this, “barring an asteroid strike on Washington.”
Wages also accelerated in February, with average hourly earnings rising six cents, or 0.2 percent, to $26.09, following January’s five-cent increase, another sign employers are having greater difficulty filling open positions.
Averagely weekly earnings stood at $897.50, up 2.5 percent over February of last year.
He and other economists also pointed to the unseasonably warm temperatures as a factor boosting jobs growth, including the construction sector which added 98,000 jobs over the last two months.
“We’re pretty sure that both January and February payrolls enjoyed a weather boost,” Shepherdson wrote in a client note.
Shepherdson said current trends suggested the unemployment rate could hit 4.5 percent before June, when he expects the Fed to hike again.
In the goods-producing sector, payrolls rose by 95,000, the highest level since March of 2000. Manufacturing, which has trended steadily upwards since early 2010, added 28,000 new positions for the month.
Employment in the retail sector fell by 26,000 jobs.
Among major demographic groups, the unemployment rate fell for most but rose by 0.4 points among African Americans to 8.1 percent.
The share of long-term unemployed, or those without work for more than 26 weeks, was little changed at 1.8 million.
Gary Cohn, director of the White House’s National Economic Council, touted the latest employment report as “a perfect number” and a sign of job creation spurred by the Trump administration.
“I think this number reaffirms everything that we’re trying to do,” Cohn told CNBC, asserting that employment would be boosted further by the recent pledges of domestic investment that Trump has extracted from major companies.
However, Elise Gould, senior economist at the Economic Policy Institute, said the jobs numbers in fact continued trends that started “long before President Trump took office.”
“It may be tempting for today’s policymakers to claim credit for this solid employment growth but credit is only truly deserved when the economy grows faster than expected,” she wrote in a statement.
Michael Gapen and Rob Martin of Barclays also said the gains in the manufacturing sector were likely due to a stabilization in the sector after a subdued 2016.
“We see no reason to be overly optimistic in the detail,” the wrote in a client note.
Wall Street greeted the news by moving slightly higher after trending downward for much of the week, with the blue-chip Dow Jones Industrial Average having added 0.1 percent on the previous day’s close shortly after 1630 GMT.—AFP