U.S. Jobs: Great Gains, Slow Wage Growth in February
With the latest Employment Situation Summary now available from the U.S. Bureau of Labor Statistics with numbers for February, things are looking reasonably good. Unemployment is unchanged at 4.1 percent, while jobs added for February are a solid and encouraging 313,000.
In addition, numbers for December were revised upward by +15,000 to 175,000, and for January by +39,000 to 239,000. That puts the monthly job gains for the past quarter at a much healthier 242,000 for December through February, buoyed considerably by the most recent month's 313,000 jobs added.
While we're in the upper end of the monthly job growth range, we've seen numbers at or above this level four other times since 2008. Source: U.S. Bureau of Labor Statistics
That said, average hourly wage growth for February increased by 3 cents less per hour than it did in January: $0.04 an hour versus $0.07 an hour. As noted by NPR, this causes a dip in the year-over-year wage growth figure from 2.9 percent for January to 2.6 percent for February.
Thus, while it's pretty much good news all the way around, the overall employment outlook is not all champagne and roses just yet. Where did those job gains appear? Let's take a walk through the Summary's "Establishment Survey Data" for some key data points:
Construction jumped by 61,000, which includes a rise of 38,000 for specialty trade contractors, and 16,000 for building construction. Construction growth often presages overall economic improvement.
Retail trade added 50,000 jobs, including 18,000 in general merchandise stores, and another 15,000 in clothing and clothing accessories stores. That means that employment remains level in this sector, even in the face of normal seasonal employment dips in retails when the holiday shopping season ends.
Professional and business services jobs grew by 50,000 for February, with the majority portion of that in temporary help services, at 27,000 jobs added. This sector has averaged a bit more than 41,000 jobs per month in the past 12-month period.
Other sectors with more modest gains include: Financial activities (+28,000), mining (+9,000), and healthcare (+19,000). Other major sectors held relatively steady with little change over the preceding month.
The information sector shows us 89,000 unemployed, for an unemployment rate of 3.2 percent. That puts sector size at 2.8 million. For the year previous, those numbers were 105,000 and 3.9 percent, respectively, for a sector size of 2.7 million. This is the first time I've seen those numbers translate into sector growth (of 89,000 jobs as compared to the same time in 2016).
Even modest increases in our home sector are usually good news, because IT is becoming a basic economic driver for all sectors. CompTIA finds likewise.
CompTIA's latest Employment Tracker reports IT occupation employment at 5.3 million, and IT sector employment at just over 4.5 million, both at peak levels over the past 23 months (though IT sector employment has hovered at or near this mark since last November).
What does it all mean? In general, things are looking pretty solid, both in terms of overall unemployment and monthly jobs growth. I'm a little puzzled that wage growth slacked off a bit in Feburary. Given those other two conditions — namely, low unemployment and robust job growth — the normal trend is for wage growth to accelerate.
We'll see how this trend moves over the months ahead. In general, however, things look at least fair to middling, if not just a smidgen better than that.