WASHINGTON (MaceNews) – The slowdown in jobs growth in February was so abrupt – payrolls growth of only 20,000 – that analysts were trying to judge to what extent the results reflected special circumstances.
The contrast with January’s remarkable surge in job creation went beyond a typical backwash in the following month, especially since January was revised up. Now January has 311,000 new payroll slots and December is up as well, at 227,000, for a two-month upward tweak of 12,000.
At the same time the unemployment rate improved 0.2 to 3.8%. As recently as November it was a tenth lower yet it’s in a region that prior to the financial crisis had not been seen since April 2000.
To the extent the numbers could be justified, they added to the argument the Federal Reserve is on hold for at least the first half of this year, particularly when the ECB’s easing stance on Thursday is added to the mix.
Earnings were a distinctly positive element, up 3.4% for the year through February – the most in the current recovery – and the labor participation rate, at 3.2%, did not deteriorate.
Analysts were quick to seize on the implosion of construction jobs, a drop of 31,000 in the month, to ascribe at least some of the February swoon to severe snowfall over much of the nation. There were also suspicions that the government shutdown, which ended Jan. 25 after 35 days, was somehow adding to February’s anomalous results even though its direct effects on February should have been minimal.
Yet weakness was pervasive, with manufacturing jobs up just 4,000, health care gaining a weakfish 21,000, and many other categories from the oil patch and financial activities to retail trade and transportation showing almost no change.
Still, the category most directly associated with business development, the professional and business services segment, turned in a strong performance, a 42,000 job increase that alone was more than double everything else.
The broadest measure of unemployment, dubbed “U-6,” that includes those forced into working fewer hours and those at the periphery of the labor market, improved by the most on record, an eight-tenths decline to 7.3%.
—
Markets did not immediately show much if any reaction to the jobs numbers, with the Dow industrials off 149 more than an hour later, just about what stocks futures had indicated before the report. At the same time the 10-year Treasury was unchanged at 2.641%. The dollar index weakened only slightly.