USA jobs shock as growth slows

USA jobs shock as growth slows

The average workweek was 34.4 hours in February, down from 34.5 a month earlier.

Last month, employment at construction sites fell by 31,000 jobs, the biggest drop since December 2013, after increasing by 53,000 in January.

Some economists believed the government shutdown that lasted from December to late January would result in negative jobs numbers due to the number of federal government employees that were furloughed when employment data was measured.

State labor officials plan to release February numbers next week. Private sector employment grew faster, adding 1,000 jobs or 1.1 percent, reaching 95,000 jobs, according to the report.

The US economy created the lowest number of jobs for a year-and-a-half in February, well below forecasts. But the unemployment rate fell to 3.8 percent from January's 4 percent, and earnings growth picked up.

With wage increases continuing to accelerate but little indication that price inflation or inflation expectations are rising, the Federal Reserve has room to hold pat.

February's meager gain in non-farm payrolls is offset by an outsized increase in January, a number that was revised upward in this report, to 311,000, from a first estimate of 304,000.

That said, I expect a strong gain in payrolls of 190,000 and expect to see the unemployment decline to 3.8 percent.

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Despite the weakest gain in 17 months, average hourly earnings increased by 3.4 percent.

"Weakness in capex and exports, much of it tied to knock-on effects from the tariffs and trade-war confusion generally, are likely behind the slowdown in hiring by the manufacturing sector", said Steve Blitz, chief US economist at TS Lombard in NY. One solid reading was professional and business services, with a 42,000 increase.

The decline in the unemployment rate may seem contradictory to the weak job creation, but the figure is derived from a different survey and reflects a shrinking labor force. The employment-population ratio, at 60.7%, was unchanged over the month but was up by 0.3 percentage point over the year.

The broader unemployment rate that counts discouraged workers as well as those employed part-time for economic reasons dropped to 7.3 percent in February from 8.1 percent in January.

Retail payrolls fell by 6,100 jobs.

Manufacturing jobs level remained unchanged over the month.

Trade, Transportation and Utilities added 2,500 (+0.4%) jobs over the month. The education and health care sector added only 4,000 jobs.

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