Economy Added 273,000 Jobs in February Ahead of Virus Impact

A Waffle House representative speaks to potential applicants during a job fair in Atlanta last year. (Bob Andres/Atlanta Journal-Constitution via AP, File)

(CN) – American employers added 273,000 jobs last month, signaling that the coronavirus outbreak has not yet affected the U.S. labor market.

The number of new positions in February beat expectations of about 165,000 new jobs. However, economists expect hiring to drop in the next few months as the outbreak of the virus, known as COVID-19, takes a toll on the economy.

The Labor Department report released Friday also shows that the unemployment rate fell back to a 50-year low of 3.5%, down from 3.6% in January.

Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, said the data collection for the jobs report “was too early in February to see the expected impacts of COVID-19.”

“Manufacturing—the first sector expected to feel the effects of any supply chain disruptions because of COVID-19—rose by 15,000 jobs in February,” she wrote. “Leisure and hospitality continued to rise in February, but may take a hit in coming months as COVID-19 spreads.”

In addition to gains in manufacturing and hospitality, employers added 42,000 jobs in the construction sector while health care and social assistance gained 56,500 positions.

Government jobs grew by 45,000, which includes 7,000 temporary census workers, as the professional and business services sector gained 41,000 positions.

Some industries saw slight decreases – retail trade shed 7,000 jobs and transportation and warehousing lost 4,000.

Nick Bunker, an economist at Indeed Hiring Lab, said “the labor market has been in a strong position heading into the unknown.”

“While it’s too early to see the impact of the coronavirus on the labor market, we can say the labor market was in a good place before the virus began to spread. But the next few months will be a test of just how resilient this labor market is,” he wrote.

Average hourly wages rose modestly with a 3% increase over this time last year, down from 3.1% in January, and currently stand at $28.52 an hour, according to Friday’s report.

“Workers are continuing to get pulled off the sidelines, but employers aren’t feeling much pressure to raise wages to attract and retain the workers they want,” Gould said.

The economy averaged 178,000 new jobs per month in 2019.

The Labor Department report comes three days after the Federal Reserve announced an emergency half-point cut to its key interest rate to protect the economy as the coronavirus outbreak drags down markets worldwide.

Fed Chairman Jerome Powell said in a news conference Tuesday that COVID-19 “will surely weigh on economic activity both here and abroad for some time.”

The Dow Jones Industrial Average has fallen more than 4,000 points since mid-February as investor fears grow amid the outbreak. The index was down nearly 2% Friday morning despite the better-than-expected jobs numbers.

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