Hiring tumbles as USA employers add just 20,000 jobs
- Author: Eleanor Harrison Mar 11, 2019,
Mar 11, 2019, 10:31
Average hourly earnings for production and non-supervisory workers accelerated to a 3.5 per cent annual gain.
Hiring in the United States was the weakest in 17 months in February while wage gains were the fastest of the expansion and the unemployment rate fell, a possible sign that America's jobs engine is starting to slow down. Also, Institute for Supply Management surveys showed measures of manufacturing and services sectors employment dropped in the month, while the Fed on Wednesday reported "modest-to-moderate gains" in employment in a majority of the USA central bank's districts. Total unemployment is now at its lowest since 2000, and a further indication that the USA labor market remains very tight.
The Dow Jones Industrial Average opened down 212.81 points, or 0.8 percent, at 25,260.42. Retail sales, homebuilding, business spending and exports all declined in December, setting the economy on a slower growth path.
Professional and businesses services, healthcare and wholesale trade employment were the strongest sectors of growth in February's jobs report. Jim O'Sullivan of High Frequency Economics agreed with others that special factors may be to blame for the sharp drop in hiring.
That is an indication that at long last firms are being forced to pay more to attract workers.
Payrolls increase by just 20K in February, significantly below the 180K expected.
"We've seen a spike in job postings that say, 'No experience necessary, ' or, 'No prior experience required, '" said Julia Pollak, an economist at ZipRecruiter.
Official data showed that the number of people ending part-time jobs or on temporary leave dropped by 225,000.
"Employers are finding all these ways to sweeten the deal and invest in their employees", Pollak said. Temporary help services added 5,800 jobs. That shook loose some applicants.
The slowdown in hiring was flagged by first-time applications for jobless benefits, which were elevated in February.
The sharp slowdown in hiring, which may have been worsened by unseasonably cold weather, comes after employers added a blockbuster 311,000 jobs in January, the most in almost a year.
The manufacturing sector created 4,000 jobs, the fewest since July 2017, after hiring 21,000 workers in January. The unemployment rate just went lower. However, the headline employment rate dropped further than anticipated, down to 3.8%, while real unemployment (the U-6 rate) plunged from 8.1% to 7.3%.
The economy produced only 20,000 new jobs in February for its weakest showing since September 2017, according to the Labor Department's monthly report. They would likely have been counted as unemployed in the BLS household survey in January. The government shutdown only mildly affected the establishment report and had no impact on the jobs number, due to the Bureau of Labor Statistics's methods.