Employers added 235,000 workers to their payrolls in February, the government reported on Friday, a hefty gain that clears the path for the Federal Reserve to raise its benchmark interest rate when it meets next week.
The official jobless rate fell to 4.7 percent, from 4.8 percent in January, while average hourly earnings grew by 0.2 percent in a report that overlaps with President Trump’s first full month in office.
“They’re ready to go,” said Diane Swonk, founder and chief executive of DS Economics, referring to the central bank’s expected vote next week to raise rates from their historically low levels. The overall economic momentum and optimism was given an extra push by February’s unusually warm weather. Almost a quarter of the jobs, about 58,000, came from construction alone, Ms. Swonk noted, and manufacturing also bounced back.
Over the past three months, including revisions announced Friday, monthly job growth has averaged 209,000, while year-over-year wage growth jumped up to 2.8 percent.
Although the economic anxiety that helped put President Trump into the White House remains, the official jobless rate is near what the central bank considers full employment — a threshold where, in theory at least, everyone who wants a job at the going rate can find one.
At the same time, jobless claims are near a 44-year low, the stock market is surging, and consumer spending is growing, bolstering the case for those who argue the economy is strong enough to withstand a rate increase.
Recruiters and employers complain that qualified workers are scarce, pushing them to raise wages, strengthen benefits and offer cushier amenities at the office. “There is a war for talent,” said Lauren Griffin, senior vice president at Adecco Staffing USA. “We’ve got people in orientation classes and they get up and leave because they’re contacted about another job that might be more money.”
Even lower-skill workers in some sectors are finding themselves in more demand. The year-over-year wage gains for store managers and cashiers, for example, were twice the national average, said Andrew Chamberlain, chief economist at Glassdoor, a career website.
Bigger paychecks are something that most Americans, after years of stagnant wage growth, are particularly eager to see. The Federal Reserve, too, has been waiting for an increase, but it is also wary of wages rising too fast. The board’s members want to head off incipient inflation and so have begun to slowly raise rates, which makes borrowing and risk-taking more expensive. At the same time, the Fed wants to avoid putting the brakes on job hiring, especially because the benefits of the eight-year-old recovery have been so unevenly distributed.
Balancing those two goals is tricky.
A broader measure of unemployment — which includes the millions of Americans who have given up looking for work altogether or are working part time but would prefer full-time jobs — dropped to 9.2 percent but is still high given how tight the labor market otherwise looks.
“The share of adults between the ages of 25 and 54 with a job hasn’t even recovered to pre-Great Recession levels, which were, in turn, far below the peaks reached in the late 1990s,” said Josh Bivens, director of research at the left-leaning Economic Policy Institute. “And most importantly, no durable and significant acceleration of wage growth to healthy levels has happened yet.”
Re-engaging men and women who have dropped out of the labor force remains a challenge. The labor force participation rate, though still below its pre-recession levels, ticked up to 63 percent, evidence that sidelined workers can still be lured back into the work force.
Where you live and what you do for work can determine how bright your economic prospects are.
Those who reside in or near larger cities are receiving the highest gains, despite high housing costs. Large metropolitan counties have seen more than twice the annual wage growth of nonmetropolitan areas, according to the latest figures from the Bureau of Labor Statistics.
“Higher-wage jobs might be following educated, young workers, who are increasingly living in dense, urban neighborhoods as other demographic groups move to the suburbs,” said Jed Kolko, chief economist at the job-search site Indeed. “Broader economic shifts also favor big cities: The occupations projected to grow tend to be more urban, while shrinking sectors like manufacturing and farming tend to be located outside large metros.”
That is disappointing for people with longstanding ties to smaller, more rural communities. “A lot of this has to do with mobility,” said Steven W. Rick, chief economist at CUNA Mutual Group, an insurance company. “People are going to have to move where the jobs are and not expect the jobs to come where they are.”
If some are in the wrong place, others lack the right skills for an economy heavily geared toward information and services. “There is a certainly still a talent shortage out there,” said Michael Stull, senior vice president at Manpower North America, a staffing agency. The firm’s annual survey of 2,200 hiring managers showed that 46 percent reported they had difficulty filling job vacancies in 2016, up from 32 percent in 2015.
There are potential headwinds. Dissension among Republicans and unpredictability about President Trump’s course in several policy areas could constrain the hiring outlook. “Uncertainty means you don’t pull the trigger right now,” Ms. Swonk said.
The future of the Affordable Care Act and a possible replacement is making hospitals and community health centers cautious about adding to their staffs, she explained. And a strong dollar and a potential backlash against the White House’s travel ban could slow tourism, and thus hiring in the sector. Mr. Trump’s across-the-board hiring freeze on federal government jobs dragged down overall job growth, and any additional federal cutbacks are likely to further depress those numbers.
The uncertainty extends to prospects for tax cuts. Some Wall Street analysts, expecting delays, have pared down their growth forecasts for 2017, after recently raising them.
For the moment, though, optimism about the job market remains strong.
“The economy is riding a wave of bullish sentiment postelection,” Mr. Chamberlain of Glassdoor said. “We’re seeing strong labor demand across the board and no sign of slowing right now.”
Let’s block ads! (Why?)
Read More
Powered by WPeMatico