F ebruary Job Creation Report Beats Expectations The BLS Employment Situation report showed 175,000 new jobs created in February, exceeding expectations. The news was a welcome, given the weak job creation seen in December and January. Even those dismal numbers were revised upward by 9,000 and 16,000, respectively.
Good News – The Unemployment Rate is Up
The unemployment rate edged up 0.1% to 6.7%, largely because the number of people seeking jobs grew faster than the working age population. The broadest measure of unemployment, the U-6, fell 0.1% to 12.6%. These two facts suggest that improving employment prospects, and perhaps expiring unemployment benefits, are inducing people to reengage with the labor market.
Participation Rate Unchanged
The participation rate, the portion of the working age population participating in the workforce, has been in a long slow decline since 2000. The rate nudged up 0.2% in January and remained flat in February at 63%. Time will tell whether we have seen the trough and participation rates will start to rise.
Where the Jobs Are
Many commentators speculated that the harsh winter has restrained job creation. What seems clear is that inclement conditions in heavily populated regions contributed to the abbreviation of the average work week by 0.1 hours overall, and by 0.2 hours for production and nonsupervisory personnel. The Retail sector lost jobs, as did the Federal Government, while increased State & Local government hiring turned the overall public sector positive.
Private sector categories showing gains included financial roles, real estate services, wholesale, and food services. Manufacturing, construction and health care were fairly flat.
Banner Month for Temp Labor
For the first time Temp Agency employment exceeded 2.8 million jobs. Each month since August 2013 has set a new record level of temp employment.
Temp employment also achieved a new record as a percentage of nonfarm employment, at 2.03% it squeezed past April 2000 to set a new high.
Revisions to temporary labor estimates became less volatile in February:
As usual, much of the analysis of the employment release focused on the potential impact on Federal Reserve monetary policy. Another prominent theme was the impact of the weather on the job creation levels over the past three months.