Job growth ‘stalled’ in February - ‘adding to signs of a sharp slowdown’


The economy added 20,000 jobs in February and the unemployment rate fell 0.2 percent to 3.8 percent, according to the Bureau of Labor Statistics .

The sharp slowdown in hiring, which may have been worsened by unseasonably cold weather, comes after employers added a blockbuster 311,000 jobs in January, the most in almost a year.

The monthly jobs report is used by the media and politicians as a proxy for the overall health of the US economy. Economists project the expansion will slow this year, amid weaker global growth and the fading impact of fiscal stimulus such as President Donald Trump's tax cuts. Even as other parts of the US economy show signs of slowing down, the labor market has managed to stay strong. "While the gain might be somewhat exaggerated by the small number of new hires (who start at lower wages), earnings are up 3.4% over the past year, a new cycle high".

January's job growth was revised up to 311,000 from 304,000 and December was revised up to 227,000 from 220,000. The drop in unemployment leaves the unemployment rate within its recent range.

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Economists polled by Reuters had forecast nonfarm payrolls rose by 180,000 jobs last month. That raised the annual increase in wages to 3.4 percent, the biggest gain since April 2009, from 3.1 percent in January. The prime-age (25-54) labor force participation rate is still up 0.4 points over the past year, which has helped to arrest the downward trend in unemployment even as job growth has been robust. The Labor Department suggested that furloughed workers from the government shutdown returning to work also contributed to the the lower unemployment rate.

While optimism among US manufacturers remains high, for example, almost 72 percent of respondents listed hiring as a tob concern.

The construction sector saw the worst performance in February, with employment falling by 31,000 jobs compared with an increase of 53,000 in January. One solid reading was professional and business services, with a 42,000 increase.