That makes the third straight month in a row of over 200,000 new jobs added. It is also the 39th month in a row of continuous job growth.
The 275,000 increase was also well over the 200,000 average adds per month during the previous twelve months.
Unemployment was also up as of the close of February to 3.9%. That’s a slight rise from January’s 3.7%, which still leaves unemployment remaining at below 4%, a rate which was not stable like this for decades.
Of note is that the unemployment increase was driven to a major extent by new people entering the workforce rather than because of net job losses. That also suggests a more stable economy than the numbers alone might suggest.
Average hourly earnings rose by 5 cents to $34.57 for the month. That is a significantly lower rise than the 18 cent per hour gain logged in January. The 5 cents per hour gain last month represents a 0.1% month-to-month increase, and – combined with the previous 11 months of raises – works out to a 4.3% net salary increase for the last year.
Paired against the inflation increase number, this means salaries are roughly just keeping pace with inflation.
Employment Changes by Industry Category
Topping the hiring charts this month was the medical industry. It brought in 67,000 new jobs for the month, showing strong growth at a rate well above the previous 12 months’ average of 58,000. Hiring for ambulatory health care and hospitals, both of which added 28,000 new people to payrolls, drove much of the gains. Nursing and residential care facilities grew their staff by 11,000.
Coming in at number two was government employment, a category which often grows shortly after the beginning of each calendar year and especially in an election year. It was up by 52,000 and was roughly in line with the average of 53,000 this area brought in since last March.
Food services and drinking establishments came in third, with 42,000 new hires. That too was about the same as the past average rates, but it did represent a major jump after little job growth occurred in this area over the last three months.
Next came social assistance on the list. It added 24,000 new hires this time, only slightly over the previous twelve-month average of 23,000/month. As in previous months, individual and family service jobs drove this category. There were 19,000 new hires in that area for February.
The Transportation and warehousing category was fifth in total job growth, with 20,000 new employees. The biggest subcategory for this was in the couriers and messenger market, which brought in 17,000 new people; that represented a strong turnaround after having lost a total of 70,000 people in this area from November through January. For February, the air transportation area which contributes to this was up slightly, by 4,000, while warehousing and storage shed 7,000 employees.
Overall, the transportation and warehousing industry is one of the areas which ratcheted down rapidly after the severe supply chain crisis eased after the pandemic lockdown period was over. This category reached peak employment in July 2022 and has lost 144,000 employees nationally since that time.
Construction, always a bellwether in estimating the future of the economy, trended up last month again with 23,000 payroll additions. That is slightly above last year’s average growth rate for this area of 18,000 jobs brought on board each month. Within this category, heavy and civil engineering construction was responsible for most of the growth in February, with 13,000 adds.
Retail trade last month grew by 19,000 for February. Within this area, general merchandise retailers saw the largest expansion, up by 17,000 employees. Health and personal care retailers grew as well, by 6,000 jobs, as did automotive parts, accessories, and tire retailers, which brought 5,000 new people in. Losses grew in the building material and garden equipment and supplies dealers and electronics and appliance retailers subcategories last month, down by 6,000 and 2,000 hires, respectively.
All other major industries changed little in their hiring last month. This includes financial activities; information services; mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; professional and business services; and other services.
Commentary
Prior to these labor statistics having been unveiled, most economists believed February 2024’s numbers would continue the steady but slowing growth trend of the past several months. That of course did not happen.
That drove analysts like High Frequency Economics’ Chief Economist Rubeela Farooqi, to focus on the overall upside surprise in the economy as a sign to watch.
“We’ve been expecting a slowdown in the labor market, a more material loosening in conditions, but we’re just not seeing that,” Farooqi said after yesterday’s numbers were posted.
Despite those optimistic remarks, there are cautions about the data that should be noted. January’s exceeding robust job growth report released a month ago by the feds claimed the economy had added 353,000 jobs. After audits and corrections, that number fell to just 229,000. December’s estimates were also cut, driving the total job growth for December and January down by 167,000 from what the Bureau of Labor Statistics originally claimed. No one should be surprised in February’s is readjusted significantly later also. The numbers for the most recent month is always an estimate because the actual data is not simply not yet available. The numbers also don't account for any of the people working in the black economy for cash. Many of the millions of migrants who have poured across the border since Biden occupied the White House are working under the table.
There is also that certain categories of jobs are under increased hiring pressure and may in fact be capable of growing even faster than they are now. One of those areas is nursing, where an increasing number of the most experienced staff are retiring or too sick to work and forever leaving the workforce. It is also a tough area to recruit for, according to employment agencies involved, and could mean substantial shortages for the healthcare industry ahead. Analysts are forecasting some of that need may end up being supplemented from a new surge in immigrants with nursing training, rather than by from Americans looking for new positions in this area. Such a surge will also almost certainly entail hiring job salaries for the same positions. But regardless of how the hiring happens, it could mean the medical industry job growth that has in recent months been at the top in terms of numbers could subside somewhat by mid-year.
Another indicator of what could happen in the future is that employee confidence about their jobs has been dropping lately. That data comes courtesy of Glassdoor, an enterprise which rates other companies relative to their desirability as a place to work. Why this statistic is relevant is that employees are among the most “plugged-in” to hiring trends in their industry. Glassdoor’s database, which admittedly is skewed slightly towards technology companies, showed in a March 4, 2024, release on this factor that employee confidence has fallen to the lowest level since 2016. That value was reportedly driven by increased layoffs as of Q4 2023 and into this year, with tech companies such as Google and Meta shedding more jobs of late and media enterprises beginning some consolidation and cutbacks as 2024 began. The continued deployment of AI will hasten layoffs in some sectors.
A wildcard in all this is what the Federal Reserve Board might do in terms of lowering prime bank lending rates this year, something it has already indicated it will begin by mid-year. If it does so, that could cause some short-term ratcheting up of hiring, as companies capitalize on lower costs of borrowing to consider internal investments they had been putting off for some time. Even so, it is hard to bet on something like this until a new pattern of interest rate reductions from the Fed begins to fall into place.
So, while there was better than expected job growth for February, there are several indicators pointing to caution about the job market as the year moves forward. Hiring numbers for March and April will be dissected even more than usual for signs of any overall weakening.