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Job Gains Surprisingly Strong in February

Job Gains Surprisingly Strong in February

For the second month in a row, national job gains were solid.

According to the Bureau of Labor Statistics, the U.S. added 273,000 jobs in February, while January’s monthly gain was revised upward to match this amount. The national unemployment rate ticked down to 3.5%, matching the 50-year low from September 2019.

As of February, the nation’s monthly positive gain streak continued to 113 consecutive months, or more than nine years. Additionally, the average monthly growth rate was nearly 201,000 jobs, at its highest point since January 2019. In comparison, the 12-month average for monthly job gains through February 2019 was smaller at 171,400 jobs, but the average unemployment rate that year was higher at 3.9%.

Average hourly earnings growth for all employees was 3% in February and has averaged 3.3% for the year. The monthly wage figure increased $0.09 between January and February, and was up $0.83 from February 2019, to $28.52. Wage growth has been slowly creeping up, as it averaged 3.1% through February 2019 after a showing of 2.6% the previous two years.

With the strong gains of the past two months, a little more than 2.4 million jobs were added in the 12-months ending February 2020 compared to almost 2.1 million for the same period one year ago. This annual growth expanded the job base by 1.6%, well above the 12-month average of 1.4%. While the February rate is 20 basis points (bps) above the growth rate from February 2019, it is even with the rate seen in February 2018.

The civilian labor force (CLF) participation rate was 63.4% in February, unchanged from January but up 30 bps from last year. The employment-population ratio of 61.1% was up 40 bps from February 2019. The total number of unemployed (5.787 million) is down about 394,000 from last year, and the number of people not in the labor force who currently want a job has fallen from 5.2 million last February to 4.9 million currently. Compared to last month, the number of unemployed decreased by 105,000, easing the unemployment rate to 3.5% as the civilian labor force decreased by 60,000 from January.

The number of job leavers decreased by 64,000 from last year to 777,000 and was down 59,000 from January, but the proportion of unemployed due to leaving jobs was about the same as last year at 13.4% of all unemployed persons. Job leavers are workers who quit or voluntarily leave their previous job and immediately began looking for new employment. The number of part-time workers for economic reasons (4.32 million in February) fell by 16,000 from February 2019, and the number of part-time workers for non-economic reasons increased by 960,000 to 21.8 million. The U6 unemployment rate, which includes part-timers for economic reasons and marginally attached workers, ticked up 10 bps to 7% from January, and has remained at or below 7% since August.

The number of long-term unemployed workers (out of work for 27 weeks or more) fell by 177,000 from February 2019 to 1.1 million, and the average duration of unemployment fell to 19.2 weeks from 20.7 last year. The number of multiple jobholders increased by 358,000 year-over-year to 8.18 million. Meanwhile, the number of discouraged workers not in the workforce (421,000) dropped by 7,000 from one year ago.

Industry Focus

Strong monthly gains in national employment was felt across virtually every industry. Monthly job gains were strongest in the Education & Health Services (+54,000), Leisure and Hospitality (+51,000), Government (+45,000), Construction (+42,000), and Professional & Business Services (+41,000) industries.

• The Education and Health Services industry’s gain of 54,000 jobs were all in health care sectors. The social assistance (+24,900) subsector – particularly individual and family services (+17,500) led the way, with ambulatory health care services (+23,600) and hospitals (+9,700) adding to this month’s total.

• The food services and drinking places subsector (+52,600) accounted for the Leisure and Hospitality industry’s gain of 51,000 jobs in February. Arts, entertainment, and recreation added only 2,100 jobs for the month while accommodation lost 2,800 jobs.

• The Government sector’s 45,000 job gain for February was due to strong growth at the local (+19,000) and state (+18,000) levels, but Federal employment gained 8,000 jobs for the month as well.

• Better weather helped the Construction industry see a strong month with an additional 42,000 jobs added in February. Specialty trade contractors’ 25,600 job gain was almost evenly divided between residential (+12,200) and non-residential (+13,400), while construction of buildings added 13,100 jobs.

• The Professional and Business Services industry gained 41,000 jobs in February, primarily in the higher-paying professional and technical services sector (+32,300). Architectural and engineering services (+10,300) led that segment while the administrative and waste services sector gained the same amount for the month, mostly in investigation and security services (+4,900) and other support services (+3,900).

• The Financial Activities industry gained 26,000 jobs for the month, with growth in the finance and insurance sector (+13,600) almost even with the real estate and rental and leasing segment (+12,900).

• More workers were back on the job in the motor vehicles and parts (+6,800) subsector in February, leading to a gain of 11,000 jobs in durable goods manufacturing. Additionally, several subsectors contributed to a net gain of 4,000 jobs in nondurable goods employment, pushing the monthly gain in Manufacturing to 15,000 jobs.

• The Other Services sector gained 4,000 jobs in February with solid growth of 5,300 jobs in repair and maintenance employment offset by a loss of 1,400 jobs in membership associations and organizations.

• The Information industry’s 4,000 net job growth for the month was due to a mix of gains and losses across its six subsectors, with publishing (+3,000) gaining the most and telecommunications (-1,000) contracting the most.

• The Mining and Logging industry also gained 4,000 jobs in February as the support activities for mining subsector gained 2,700 jobs.

• The Trade, Transportation and Utilities (-13,000) industry lost jobs in two of its three main industries. Retail trade was off by 7,000 jobs as losses in clothing and clothing accessories stores (-12,200) and building material and garden supply stores (-5,500) more than offset gains in health and personal care stores (+10,900). Wholesale trade lost 2,600 jobs for the month while the transportation and warehousing sector lost 4,000 jobs. Utilities were up by 500 jobs in February.

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