February Jobs Report: Job Growth Slows Down but Wages Pick Up
Author: Robert S. Teachout, XpertHR Legal Editor
March 12, 2019
The US unemployment rate fell by 0.2% to 3.8% in February despite anemic new job growth, according to the Department of Labor's February employment situation report, released last week. Nonfarm jobs grew by only 20,000, a sharp decrease from the past several months, and well below the 170,000-180,000 jobs most economists had forecast. But average hourly wages jumped 3.4% over the previous year.
Despite February's hiring slump, revised figures show US employers posted stronger job growth in the two months prior than first reported. December and January data showed that employers added a total of 227,000 and 311,000 jobs respectively - 12,000 more jobs than originally reported.
Although the number of new jobs fell, the overall unemployment rate dropped from 4.0% in January to 3.8% as the overall number of unemployed people decreased by 300,000 to 6.2 million, according to the Bureau of Labor Statistics (BLS). Since March 2018, the unemployment rate has fluctuated between 3.7% and 4%.
In addition, the number of workers who experienced job loss, whose temporary jobs ended and who were temporarily laid off decreased by 225,000. The BLS reported that federal employees furloughed because of the partial government shutdown in January also are reflected, in part, in these groups of workers.
The 3.4% year-over-year increase in average hourly earnings is the highest increase since April 2009 and the seventh month in a row at or above 3%. "The year-over-year average hourly earnings growth surpassing 3% for the seventh straight month is good news for America's workers," said Secretary of Labor Alexander Acosta.
Given the tight labor market, many economists had expressed concerns that the historically low unemployment rates, until recently, had not translated into higher wages. A recent Brookings Institute report noted that wage growth has been nearly zero after adjusting for inflation.
Some experts are hoping that the earnings increase in the data indicates that employers are starting to open up their wallets to attract and retain workers. Julia Pollak, a labor economist for ZipRecruiter, said employers have been raising wages, expanding training efforts and improving working conditions to address the challenge of finding skilled workers.