The US economy added 235,000 jobs in February, while the unemployment rate fell to 4.7 percent from 4.8 percent the previous month and wages grew 2.8 percent over February 2016, according to the latest report from the Bureau of Labor Statistics. The strong jobs report means the Federal Reserve is likely to raise interest rates when its leaders meet next week, the New York Times reports:
The overall economic momentum and optimism was given an extra push by February’s unusually warm weather, with almost a quarter of the jobs — about 58,000 — coming from construction alone. Manufacturing and mining also bounced up. Over the past three months, including revisions announced Friday, monthly job growth has averaged 209,000, while year-over-year wage growth jumped up to 2.8 percent. … At the same time, jobless claims are near a 44-year low, the stock market is surging, and consumer spending is growing, bolstering the case for those who argue the economy is strong enough to withstand a rate increase.
While declining unemployment is good news for the economy, the Times notes that employers are experiencing “acute labor shortages” and having to compete more aggressively for candidates:
Recruiters and employers complain that qualified workers are scarce, pushing them to raise wages, strengthen benefits and offer cushier amenities at the office. “There is a war for talent,” said Lauren Griffin, senior vice president at Adecco Staffing USA. “We’ve got people in orientation classes and they get up and leave because they’re contacted about another job that might be more money.”
While the construction sector benefited from the unusually warm weather last month, the retail sector finally hit its post-holiday slump, shedding 26,000 jobs after adding 40,000 in January. Meanwhile, other measures of unemployment and underemployment are also trending downward, the Wall Street Journal’s Eric Morath points out:
A broader measure of unemployment known as the U-5, which includes discouraged workers not actively seeking employment and others marginally attached to the labor force, was 5.7% last month. That compares to 6% a year earlier. Another measure–the U-6–which also includes workers with part-time jobs but who want full-time work, was 9.2% last month. That is down from 9.8% a year earlier. Those alternative measures have edged down during the past 12 months, but remain slightly above prerecession levels.