Scott Olson/Getty Images
- The Bureau of Labor Statistics released its February employment report on Friday.
- The economy was expected to have added 180,000 jobs last month.
- The numbers were a notable slowdown from blockbuster growth in December and January.
Offering the latest snapshot of the American economy, the official employment report out Friday showed hiring accelerated at its slowest pace in more than a year while wage growth picked up.
The Bureau of Labor Statistics said the US added 20,000 nonfarm payrolls in February, the fewest of any month since September 2017 and missing expectations for an increase of 180,000 jobs. That was a marked slowdown from a blockbuster 311,000 and 227,000 jobs created in January and December.
“We’re not going to be able to create that many jobs month in and month out,” said Ryan Sweet, an economist at Moody’s. “I think we’re going to see things begin to settle down in February and throughout the rest of this year.”
The unemployment rate fell to 3.8% after edging higher during the partial government shutdown, which kept nine of 15 cabinet-level departments shuttered for a record five weeks before ending in January.
Once a soft spot in the economy, wage gains have picked up over the past year and are expected to continue to climb. Average hourly earnings in February rose 3.4% from a year earlier, the best annual increase since 2009.
The labor market continued to pull Americans from the sidelines last month. The labor-force participation rate held steady at 63.2%, its highest level since 2013, but is still low by historical standards and compared with other countries.
Growth is widely expected to slow over the next two years in the US and other major economies. But so far, nonfarm jobs have increased by a solid 186,000 on average over the past three months.
“The weak job growth reading is not necessarily reason for concern just yet,” said Julia Pollak, a labor economist at the job-recruiting site ZipRecruiter. “The economy is still producing far more jobs than is necessary to keep pace with population growth.”
The employment report could influence the rate path of the Federal Reserve, which last increased its benchmark interest rate to a target range of 2.25% to 2.5%. Citing new economic strains, the central bank signaled in February that it could be awhile before another hike.
“There’s no question that this will reinforce the already-solid consensus for the ‘patient’ approach,” said Ken Kuttner, a Williams College economist and former Federal Reserve staffer. “And it definitely increases the likelihood that the next change in the funds rate target range will be in the ‘down’ direction.”