OVERVIEW
- The unemployment rate fell to 3.5 percent in February with payrolls expanding by 273,000 jobs, according to the Bureau of Labor Statistics.
- The Labor Force Participation (LFP) edged up to 63.4 percent. The Employment-Population ratio remained essentially unchanged at 61.1 percent but registered 0.4 of a percentage-point over the year.
- Notable job gains took place in Health Care & Social Assistance (+57,000) Food Services and Drinking Places (+53,000), Government (+45,000), Construction (+42,000), Financial Services (+26,000) and Professional & Technical Services (+32,000).
- The following sectors saw little or no change in February: Mining, Wholesale Trade, Retail Trade, Information, and Transportation and Warehousing.
- While both the number of unemployed persons and the unemployment rate remained unchanged, the rate has held steady between 3.5 percent and 3.6 percent for the last six months.
- Over the year, average hourly earnings have increased by 3.1 percent. In February, the average hourly private nonfarm wage rang in at $28.52. The average workweek for all employees rose by 0.1 hours rising slightly to 34.4 hours.
- The number of long-term unemployed (27 weeks or more) fell to 1.1. million, representing 19.2 of all the unemployed. Meanwhile, 1.4 million workers identified as “marginally attached to the labor force” remained unchanged in February.
- Revisions for the previous two months pushed the original estimates upward by 85,000. The payrolls report for December was revised from +147,000 to +184,000 while the change for January was also revised up from +225,000 to +273,000. After these revisions, job gains have averaged 243,000 over the last three months.
ANALYSIS
Lost in all of the crisis reporting about the global spread of COVID-19, last Friday’s jobs report is a bright spot in the news cycle.
The happy news is so much of an orphan that even the payroll-watching Drudge Report has opted to skim over the historic low unemployment rate. (See this link to the estimable Drudge Report’s focus on COVID-19 at the expense of Trumpian good news).
At a healthy 273,000 print, this most recent payrolls number outstripped Wall Street estimates of 193,000.
“A home run; a blowout number,” say the well-informed. The even-more estimable ADP lagged the buoyant BLS numbers. According to ADP report released on Wednesday, the private sector generated 183,000 jobs. The BLS private sector number was 228,000.
So here’s another big question: Have we reached peak job creation? The coronavirus is considered as the convenient excuse for the oncoming recession most would like to avoid. It is also an excuse for the stock market correction that has been desirable in some quarters. Even the bears are right once in a while.
But what counts is the jobs market. “The outbreak will likely lead (businesses) to postpone some hiring plans or even shed jobs if the situation worsens,” said Lydia Boussour, senior U.S. economist at Oxford Economics. How much of a shock will only be determined, as is practice, months from now.
"This is quite an insurance policy," remarked former Barron's columnist Jim McTague. “It shows that going into this infection, the economy is about as good as you can ever hope for it to be."
In related news, the Bureau of the Census and the Bureau of Economic Analysis reported that January exports were $208.6 billion, $0.9 billion less than December exports. January imports were $253.9 billion, $4.2 billion less than December imports (See Figure 1).
Here too the effects of the coronavirus are not fully known. But it appears for the present time that domestic production and consumption is at happy spot, at least politically.
The Massachusetts unemployment rate remains lower than the national average. In December 2019, the Massachusetts rate fell to 2.8 percent with the national rate for the same month at 3.5 percent. See Figure 2.
