Jobs jump by 313000 in February, best since July 2016

Javier Howell
March 10, 2018

USA employers went on a hiring binge in February, adding 313,000 jobs, the most in any month since July 2016, and drawing hundreds of thousands of people into the job market. Manufacturing had a strong month, adding 31,000 jobs. That is quite a turnaround from the sluggish job growth experienced in 2016, and it is a sign that that firms have continued to accelerate their hiring as the economic outlook has strengthened and demand and production have improved considerably.

The employers across a broad range of industries added to their payrolls with construction, retail, professional and business services, manufacturing, finance and mining topping the list. Over the year, average hourly earnings have increased by 2.6 percent. But the closely watched number dipped in February, with wages up 2.6% over the year, down from January's 2.9% growth. That's because when fewer people are hunting for work, companies eager to fill positions must offer more money to poach already employed folks - forcing their current employers to counter by raising wages.

US stock futures jumped by triple digits on Friday after employers helped drive the best job growth since July 2016. That pushed the labour force participation rate up 0.3 percentage point, to 63 percent.

Friday's market reaction stood in stark contrast to last month, when the Dow plunged 666 points on the release of January's job figures, which showed wages growing at their fastest pace since 2009.

Most of the latest United States jobs report was undoubtedly good.

"We've seen above consensus growth [measured in new jobs] with little to no inflation", Mahajan said of the latest employment data. Government employment was up by 26,000.

But judging from recent comments, at least, it seems unlikely that the Fed will pay heed to those arguments.

"The probability of four rate hikes this year increased last month a bit after the January jobs report but I think it still stays near three", said Katie Nixon, chief investment officer for Northern Trust Wealth Management. Many more people are working, including people who hadn't even been in the labor force.

It was a report that, for now, pushed aside concerns about a possible spike in earnings and the inflation that could come about as a result, and pointed instead to an economy that was, increasingly, allowing people at the margins to find employment.

"The upturn in the USA labor market will continue, with the effect of the tax reform, the weak US dollar, interest rates are still low, and I expect more investment", said Dirk Chlench, head of bond research at Landesbank Baden-Wuerttemberg.

Anecdotal reports suggest worker pay is indeed beginning to rise.

Other reports by Insurance News

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