Published: Sat, March 10, 2018
Markets | By Erika Turner

State's unemployment rate remained unchanged at 4.8 percent in January

State's unemployment rate remained unchanged at 4.8 percent in January

The American economy added 313,000 jobs in February, crushing expectations, while the unemployment rate remained at 4.1%, according to a U.S. Labor Department report Friday that could help quell inflation fears.

So, for the first two months of the year the USA economy has added 552,000 jobs, a 20.3 percent increase from the first two months of 2017.

The employers across a broad range of industries added to their payrolls with construction, retail, professional and business services, manufacturing, finance and mining topping the list. Average hourly earnings increased by 0.1% month-on-month and 2.6% year-on-year. Over the year, employment and unemployment were down by 4,000 and 28,000, respectively.

February proved to be another good month for industry employment.

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If the economy were really at full employment, wages should be growing much faster than this - somewhere in the range of 3.5 to 4 percent.

I expect workers to report a 6-cent hourly raise in February, a little off of last month's pace.

January's initial estimated wage gain - showing the biggest increase since the recession ended - had stoked concerns in financial markets that bigger than expected paychecks would lead to higher inflation and cause the Fed to shift its plan toward more aggressive rate increases. The jobless rate for black workers fell to 6.9 per cent after jumping almost a full percentage point a month earlier. Construction added 61,000 new jobs, a "surprisingly strong" number in the middle of winter, when construction tends to slow down, said Cathy Barrera, the chief economist at ZipRecruiter. But the still slow growth in wages implies that while people who were on the margins are returning to work, the jobs being created are still lower wage. The unemployment rate has been flat for the last five months. Over the past 14 months, the US economy has added 195,714 each month on average-a strong figure. December's data was revised up to 175,000 jobs, up from the previous estimate of 160,000. Many more people are working, including people who hadn't even been in the labor force.

And so while wages were a disappointment, a bright spot in this report was the labor force participation rate, which climbed to 63% from 62.7%, the largest increase in this figure in years. The report published today (March 9) also revised up the figure for January to 239,000. Second, digging a little deeper into the earnings data reveals that earnings for non-supervisory workers was well short of the headline 2.9 percent, meaning that the broad-based earnings gains from a healthy labor market remain elusive.

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