United States: Payrolls see strong growth in February
March 4, 2016
Non-farm payrolls grew by 242,000 in February, which was higher than January’s upward revised increase of 172,000 (previously reported: +151,000) and also exceeded the 195,000 increase the markets had expected. The result, which represented the 65th month with uninterrupted job gains—the longest streak on record—cooled fears that the U.S. economy could be joining a global slowdown and also came in ahead the FOMC monetary policy meeting scheduled for 16-17 March. The jobs report came as the Fed weighs whether to delay a further hike in interest rates. The recent market turmoil on Wall Street, due in part to economic headwinds coming from China, has been the major factor behind the Fed’s decision to hold off a further rate increase.
The private sector continues mainly to be responsible for the bulk of hiring, having added 230,000 jobs in February, while the public sector added 12,000 jobs. The notable acceleration in February can also reflect a rebound from seasonal distortions last month, particularly in the education sector. Meanwhile, both the manufacturing and energy sectors shed jobs, while services continue to be an important source of employment.
The unemployment rate, which is derived from a different survey, remains steady in February at January’s 4.9%. The unemployment rate remains at the lowest level in nearly eight years.
The unemployment rate is below the Fed’s target zone of 5.2%–5-5%, although the labor participation rate remains significantly low. Labor participation came in at 62.9% in February, which is marginally above the 62.7% in January.
Author: Carl Kelly, Economist