Total non-farm payroll employment rose by 273,000 in February, and the unemployment rate was little changed at 3.5%, the U.S. Bureau of Labor Statistics reported Friday. The consensus estimate among economists was for a gain of 165,000 new jobs.
Notable job gains occurred in health care and social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities.
Construction added 42,000 jobs in February, following a similar gain in January (+49,000). In 2019, job gains averaged 13,000 per month. In February, employment gains occurred in specialty trade contractors (+26,000) and residential building (+10,000).
In February, average hourly earnings for all employees on private nonfarm payrolls increased by 9 cents to $28.52. Over the past 12 months, average hourly earnings have increased by 3.0 percent. Average hourly earnings of private-sector production and non-supervisory employees increased by 8 cents to $23.96 in February.
The change in total nonfarm payroll employment for December was revised up by 37,000 from +147,000 to +184,000, and the change for January was revised up by 48,000 from +225,000 to +273,000. With these revisions, employment gains in December and January combined were 85,000 higher than previously reported. After revisions, job gains have averaged 243,000 per month over the last 3 months.
Lawrence Yun, chief economist for the National Association of Realtors, analyzed the report. “Another fabulous month of job creations in America,” said Yun. “However, this data is before convention and travel cancellations by many businesses as a precautionary measure against coronavirus spread. Looking back to the tragic events of September 11, 2001 when subsequent travels were greatly reduced, net job losses reached 1 million in five months and then continued throughout 2002. No event is ever the same, though; the current employment situation looks to be in better shape. Because of the extreme tight job market condition of a 3.5% unemployment rate (compared to 5.0% in September 2001), companies will be more reluctant to let workers go, knowing finding workers has been difficult. Furthermore, any positive news on vaccine discovery will quickly return market conditions to a strong position. In the meantime, the construction sector is adding jobs at a solid pace of 3% from one year ago, which is twice as fast as the rest of the economy.”
Mike Fratantoni, senior VP and chief economist for the Mortgage Bankers Association, said, “February’s much stronger job growth than expected is great news for the housing market. Last month saw a surge of 273,000 added jobs, and with the upward revisions to the prior two months, we have now averaged 243,000 over the last three months. Construction jobs notably increased as well, around triple the pace of monthly hiring in 2019. Strong job growth, coupled with a faster pace of home construction and record low mortgage rates, sets us up for a very active spring market. The caveat is of course the uncertainty regarding the coronavirus. The purchase application data in MBA’s Weekly Applications Survey will be a great barometer of future home buyer demand, as activity last week was already 10% higher than a year ago.”
