The Labor Department reported on Friday that nonfarm payrolls increased by 235,000 positions in February, above the consensus 200,000 estimate. Revisions to December and January preliminary estimates added 9,000 more jobs than initially reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 209,000 per month.
Employment in health care rose by 27,000 in February. Over the past 12 months, the sector has added an average of 30,000 jobs per month.
The unemployment rate fell 10 basis points to 4.7% in February. The unemployment rate is derived from a separate survey than the payroll employment number sited above. The number of long-term unemployed, i.e., those unemployed for more than 6 months, totaled 1.8 million and accounted for roughly 23.8% of those unemployed. Over the year, the number of long-term unemployed has declined by 358,000.
A broader measure of unemployment, which includes those who are working part time but would prefer full-time jobs and those that they have given up searching—the U-6 unemployment rate—fell 20 basis points to 9.2% in February.
Average hourly earnings for all employees on private nonfarm payrolls increased by six cents to $26.09 in January. Over the year, average hourly earnings have risen by 71 cents or 2.8%. This is up from 2.6% on average in 2016, 2.3% in 2015 and 2.1% in 2014. Increases in minimum wage rates in many states and tightening labor markets may start to put further pressure on this measure of earnings.
The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work was little changed at 63.0% in February. It is very low by historic standards and in part reflects the effects of retiring baby boomers.
The February jobs report paint a picture of a reasonably strong labor market and lends support to further rate increases by the Federal Reserve. Even prior to this report, the market was anticipating with near certainty a rate hike announcement by the Fed at the next FOMC meeting which will take place on March 14th and 15th. The data suggest that the economy is strong enough to absorb an interest rate increase.