Employment Situation: Sharp Decline Not a Trend-Changer
March 8, 2019
Bottom Line: Nonfarm payroll growth was just 20k in February, sharply less than expectations and January's growth, but the household employment survey used to calculate the unemployment rate showed solid gains after several slow months. This suggests there were data collection issues amid the government shutdown and harsh weather during the survey week for nonfarm payrolls. There were sharp declines in education and construction jobs, as well as declines in retail jobs. The less volatile professional and business services sector saw solid gains, again suggesting weather and other factors were at play in the more volatile sectors.
With the strong gains in the household employment survey the unemployment rate fell to 3.8% as the labor force tally declined slightly. Average hourly and weekly earnings growth was solid with the last three months averaging gains in-line or better than the 12-month averages.
Overall, there is not enough in this report to suggest any change in the trend towards overall tight labor markets.
Payroll Employment rose by 20k in February, compared with market expectations for an increase of 180k. The prior 2 months were revised, higher in January by 7k and higher in December by 5k.
Government jobs FELL by 5k. Consequently, private sector jobs ROSE by 25k. Overall employment is now 1.7% ABOVE its year ago level, Over the past 12 months, 2,509k jobs have been created.
- In February, the job gains were in Trade, Transportation & Utilities (+8k with -6k of those in Retail Trade), Professional & Business Services (+42k with the addition of 5.8k in Temp Help Services), Education & Health Services (+23k), Financial Activities (+6k), Manufacturing (+4k), and Other Services (+3k).
- Jobs were shed in Government (-5k), and Construction (-31k).
Article by
Contingent Macro Advisors