February job growth stagnates, unemployment falls to 3.8%
- Job growth in February was nearly stagnant, showing a gain of only 20,000 total nonfarm jobs, based on the U.S. Bureau of Statistics' (BLS) monthly jobs report. By contrast, the U.S. labor market gained 304,000 jobs in January.
- The unemployment rate dropped by 0.2% to 3.8% in February, after a jump from a record-low 3.7% in November to 4% in January. The number of unemployed people decreased by 300,000 to 6.2 million, and workers who experienced job loss, whose temporary jobs ended and who were temporarily laid off decreased by 225,000. Federal workers who were furloughed in January because of the partial government shutdown are reflected, in part, in these groups of workers, BLS said.
- Industries with the highest job growth were in professional and business services, healthcare and wholesale trade, while growth declined in construction.
Month-by-month jobs reports are snapshots of economic movement and therefore don't offer a perfect prediction for future economic activity. February's low jobs gain is notable, however, and it may be worth watching future monthly reports for signs of a possible recession.
Despite speculation that a recession is on the way, the New York Times reported the jobs report sparked some positive reaction from experts looking for signs for long-term economic growth, including 3.4% year-over-year wage growth, the strongest in a 10 years; job gains totaling 186,000, when combining December, January and February numbers; and the 0.2% drop in the unemployment rate.
"While these numbers might be disappointing to those watching the economy closely, it's important to keep in mind that the U.S. continues to see solid job growth and the report offers only a brief insight into longer-term economic trends," Marissa Geist, executive vice president of Cielo, said in a statement. "While we continue to see high demand with companies facing challenges to fill open roles and increased competition for qualified talent, we are also starting to hear that other organizations are reviewing their costs and in some cases, reducing their workforces or slowing their hiring."
Although some experts don't foresee a recession in 2020, small and medium-sized businesses (SMBs) are predicting slower profit and revenue by that time, according to a global survey by Oxford Economics for American Express. SMBs surveyed said they'll be under mounting pressure to maintain their current revenue levels in 2019. For U.S.-based SMBs, sustaining revenues and building reputations are their most important objectives for the long term. In bracing for the slowdown in revenues forecasted for 2019, companies in the study said that understanding customer demands and having a long-term plan to address economic, technological and demographic changes are crucial strategies for revenue growth.
- The New York Times The Jobs Report Was the Weakest in Months. Here’s Why.