Job Growth Stalls, Wages Rise in February

Mar 11, 2019
| Michael Altiero
February 2019 Jobs Report

Coming off a strong January, anticipation for the February Jobs Report was high. Last month, revisions showed 311,000 jobs were added and the unemployment rate rose to 4% due to impacts from the government shutdown.

Given the strong showings from the United States economy throughout 2018, all eyes have been on the first two reports for 2019.

The Bureau of Labor Statistics released the report on March 8th, and the results were mixed at best. Let’s take a closer look.
 

Job Creation Hits an 18-Month Low

January saw an extremely impressive start to 2019 with the economy adding 311,000 non-farm payrolls. Coming off this result, expectations were somewhat tempered with analysts predicting around 170,000 to 180,000 new jobs.

The results for February fell well short of these numbers, with only 20,000 jobs created. This marks the lowest gain since September 2017.

Is this a sign of things to come for the job market and the United States economy? Some experts and economists are downplaying this result, blaming the extremely low number on seasonal impacts.

However, others do believe it’s a signal that job growth will continue to stall and that an economic slowdown is on the horizon. 

Just about all experts agree that we need to wait for the next few Jobs Reports to see what job creation numbers look like.
 

Unemployment Rate (Predictably) Lowers

The longest-ever government shutdown impacted unemployment rate in January, with that number rising to 4% as government workers became temporarily unemployed.

With the shutdown over, economists expected the unemployment rate to lower once again – and that’s exactly what happened. February saw unemployment fall back to 3.8%.

Additionally, the more encompassing rate which includes discouraged workers and those with part-time jobs who seek full time jobs (which is sometimes called the real unemployment rate) dropped from 8.1% in January to 7.3% in February.

This number, too, was impacted by the end of the government shutdown and experts will be keeping a close watch in the months ahead.
 

Wage Growth Rebounds in February

A number that was monitored closely throughout 2018 was U.S. wage growth. Many experts were surprised with how slowly this number grew despite the challenges employers faced with recruiting and retaining talent.

The January report showed this number decreased to 3.2% year-over-year. So how did February compare? 

Workers in February saw their average earnings increase 11 cents an hour to $27.66m a 3.4% increase year-over-year – this marks the biggest gain since the end of the Great Recession in 2009.

Analysts predict this number to grow even more in 2019 and will continue to be an important economic factor throughout 2019.
 

What Does 2019 Have in Store for the United States Economy?

2018 was a big year for the economy and the jobs market, and it was only a matter of time until the impressive growth cooled off. But is that time now, and if so, what will it mean?

According to USA Today, economists estimate that monthly job gains will average around 170,000 this year, which would make for a healthy economy.

In the meantime, we’ll have to wait a few weeks to see how the market faired in March, and whether some of the February results become a trend.

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