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Politics & MoneyMortgage

U.S. economy adds only 20,000 jobs in February

Unemployment rate retreats to 3.8%

The U.S. economy added only a meager 20,000 jobs in February according to the latest Employment Situation Summary report from the U.S. Bureau of Labor Statistics.

Total non-farm payroll employment slightly increased by 20,000 in February, compared to a monthly gain of 223,000 in 2018.

"February job growth was surprisingly slow as employers added to payrolls at the slowest pace since September 2017," The National Association of Federally-Insured Credit Unions Chief Economist Curt Long said. "One poor report should not set off alarm bells, but given that the labor market is the lynchpin for the entire economy, it does add to existing concerns and raises the stakes for next month’s report."

The unemployment rate fell to 3.8%. According to the report, the number of unemployed persons decreased to 6.2 million in February.

“The 2019 jobs market continues to perform decently, despite the fact that the 20,000 jobs added in February were much lower than what we’ve seen over the last 18 months,” Chief Economist Danielle Hale said. “Unemployment continues to hover near 49-year lows at 3.8%.”

The jobless rates for all other groups, including men at 3.5%, whites at 3.3% and Hispanics at 4.3%, all decreased in February. However, the jobless rates for women at 3.4%, teenagers at 13.4%, blacks at 7%, Asians at 3.1%— these all showed little or no change over the month.

It is worth noting that the change in total non-farm payroll employment in December was revised to 227,000 jobs, up from 222,000. Furthermore, the change for January was revised up from 304,000 to 311,000.

With these revisions, employment gains in December and January combined were 12,000 less than previously reported.

However, the number of long-term unemployed persons held its ground at 1.3 million in February, which accounted for 20.4% of the unemployed.

The average hourly earnings for all employees on private non-farm payrolls climbed 11 cents to $27.66. Over the year, average hourly earnings have risen by 3.4%.

“Earnings grew at 3.4%, are at/near expansion highs, but are still falling behind home listing price growth of 7%. The salary/home price mismatch will continue to be a challenge well into the spring buying season, especially for first-timers trying to become homeowners," Hale continued. “Although earnings are growing at the highest rate in nearly 10 years, the Fed does not seem to be concerned about this driving inflation higher. This is helping to keep mortgage rates modestly below year-ago levels."

The majority of job gains in February can be attributed to an increase in jobs in professional and business services, health care and wholesale trade.

Notably, jobs in construction declined, reflecting recent declines in construction spending.

Here are some of the areas that showed notable changes in February:

  • Employment in professional and business services increased 42,000
  • Employment in health care increased 21,000
  • Employment in wholesale trade increased 11,000
  • Employment in construction declined by 31,000

The average workweek for all employees on private non-farm payrolls inched backward 0.1 hour to 34.4 hours in February.

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