Economy

United States jobs grew only by 20,000 in February

United States jobs grew only by 20,000 in February

With wage increases continuing to accelerate but little indication that price inflation or inflation expectations are rising, the Federal Reserve has room to hold pat. Over the last three months, job creation has averaged a slightly higher 186,000.

The length of the average workweek fell to 34.4 hours last month from 34.5 hours in January. Treasuries rose while the dollar and stock futures fell. The dollar dropped against a basket of currencies.

Hiring in the United States was the weakest in 17 months in February while wage gains were the fastest of the expansion and the unemployment rate fell, a possible sign that America's jobs engine is starting to slow down. And others argued that the economy was still resetting from the 35-day partial government shutdown, the longest in US history, which lasted from the end of December to January.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they can not find full-time employment, dropped to 7.3 per cent after hitting an 11-month high of 8.1 per cent in January because of the government shutdown.

Despite the weakest gain in 17 months, average hourly earnings increased by 3.4 percent.

That said, I expect a strong gain in payrolls of 190,000 and expect to see the unemployment decline to 3.8 percent.

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"Despite the slowdown, job growth remains strong enough for the labor market to continue tightening and put upward pressure on wages". They, however, say that source of labor supply is dwindling.

Still, economists warned against reading too much into February's weaker-than-expected hiring.

In February, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.3 million and accounted for 20.4% of the unemployed. Manufacturing added just 4,000, the fewest in a year and a half, a sign that Trump's trade war has raised costs and lowered exports for many factories. The employment-population ratio, at 60.7%, was unchanged over the month but was up by 0.3 percentage point over the year.

"The U.S. labor market is still in good shape", said Gus Faucher, chief economist at PNC Financial. With these revisions, temporary help employment growth was lower than previously reported by 6,900 jobs. Government payrolls dropped by 5,000 jobs last month, pulled down by declines both local and state government education.

Professional, Scientific and Business Services gained 1,800 (+0.3%) jobs over the month.