Jobs growth proves robust but wages sink
Employers add 242,000 jobs in February; numbers might raise odds of Fed rate hike
Employers added 242,000 jobs in February as the labor market bounced back from a short- lived slowdown and provided further evidence that it’s shrugging off global economic troubles and market turbulence.
The unemployment rate, which is calculated from a different survey, was unchanged at 4.9%, the Labor Department said Friday. A sharp rise in employment was offset by a similar- sized increase in the labor force, which includes those working and looking for jobs.
Economists surveyed by Bloomberg expected 195,000 job gains, according to their median forecast. Also encouraging: Job gains for December and January were revised up, December’s to 271,000 from 262,000, and January’s to 172,000 from 151,000.
The report drove up the Dow Jones industrial average by about 63 points Friday, lifting it past 17,000 for the first time since early January. Although it raises odds of a Fed rate hike as soon as April, investors appeared more encouraged by the good economic news than worried about a rate increase, which isn't expected at a March 15- 16 meeting.
But average hourly wages fell 3 cents to 25.35 after rising sharply in January, and are up 2.2% the past year, raising concerns that a recent pickup to 2.5% is not being sustained. The Federal Reserve is seeking signs that tepid wage gains of just more than 2% for most of the recovery are accelerating. That would help push meager inflation toward the Fed’s annual 2% target.
Also of some concern is that the average workweek fell to 34.4 hours from 34.6 hours. And the number of temporary workers dropped by 10,000 and was down for the second consecutive month. Those could be signs hiring may slow in coming months, since employers typically adjust the hours of existing workers and bring on or lay off temporary employees before adding permanent staffers.
Businesses added 230,000 jobs, led by health care, retail and restaurants. Federal, state and local governments added 12,000.
In another positive sign, a broader measure of joblessness that includes part- time employees who prefer fulltime jobs and discouraged workers who have given up looking, as well as unemployed, fell to 9.7% from 9.9%.