MANHATTAN (CN) — The U.S. labor market added 275,000 jobs in February, well above the consensus estimate of 198,000 jobs but also significantly less than the 353,000 jobs added in January.
According to the Bureau of Labor Statistics, the job gains were across a wide spectrums of industries, while the private sector accounted for 131,000 of the jobs. The biggest shifts among sectors came from construction, which gained 23,000 positions, as well as nearly 19,000 jobs gained in retail and the 85,000-job increase in private education and health services.
However, the unemployment rate increased to 3.9%, above both the 3.7% seen in January and what experts had forecast. The main drive in the increase was among adult women and teenagers, who saw their rates increase. Average weekly hours increased slightly from 34.2 in January to 34.3 in February.
The two previous job reports also were revised downward by a total 167,000 positions; January was revised down by 124,000 jobs, while December was revised down by 43,000 jobs.
“The 275,000 rise in non-farm payrolls in February may, at face value, add weight to the Fed’s view that there is no rush to start cutting interest rates, but the downward revisions to previous months’ gains leave recent growth looking less strong than previously thought,” Andrew Hunter, deputy chief U.S. economist at Capital Economics, wrote in an investors note.
On Wednesday, payroll company ADP’s own employment report marked a significant uptick in jobs from its January report, finding private employers added 140,000 jobs in February compared with 107,000 the month before and mostly in line with what analysts had forecast.
Digging deeper into the report shows the service sector accounted for 110,000 of the jobs, while medium- and large-sized businesses of at least 50 employees brought in 130,000 of the total monthly number. Wages for those staying at their jobs dipped slightly to 5.1% annualized, while they increased to 7.6% for those changing jobs.
“Job gains remain solid,” said Nela Richardson, ADP’s chief economist, adding that pay gains are still above inflation but trending lower. “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.”
The same day the BLS’ monthly Job Openings and Labor Turnover survey, called the JOLTS report, showed little change among job openings and turnover — coming in at 5.3% and 2.1%, respectively — nor any evidence of a resurgence in labor demand. For contrast, from 2017 and 2019 the job openings rate averaged 4.4%, while the quits rate averaged 2.2%.
Nick Bunker, economic research director at Indeed’s Hiring Lab, wrote on Wednesday that the report shows the U.S. labor market is not heating back up. “For many, job security remains high,” he wrote. “But the temperature of the labor market is not rising. If anything, it’s dropping.”
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