Jobs growth proves ro­bust but wages sink

Em­ploy­ers add 242,000 jobs in Fe­bru­ary; num­bers might raise odds of Fed rate hike

Chicago Sun-Times - - NATION/ WORLD - Paul David­son

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%.

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