February 2018 Employment Situation

Friday’s employment report covering February 2018 was strong.  According to the Bureau of Labor Statistics, America’s economy added 313,000 net new jobs.   This gain followed an upwardly revised count of 239,000 (originally 200,000) to start this year and an increase of another 15,000 for the December 2017 tally.  The unemployment rate held steady at just 4.1 percent. 

This latest release on employment was nearly perfect.  Besides the strong headline figures mentioned above, details within the release left little reason to grouse.  Wage growth continued higher, rising 0.1 percent, and the average workweek for all employees ticked up 12 minutes to 34.5 hours.  Private firms added 287,000 positions, including 31,000 in manufacturing.  And for the pièce de résistance, the labor participation rate put in a rare increase, rising to 63.0 percent from 62.7 percent.

This rising level of participation helped keep the unemployment rate from falling even further and signals growing confidence from working-age adults.  During the shortest month of the year, 806,000 people entered the labor market; this is the largest monthly jump since January 2003.  So, while the economy added a tremendous number of net new jobs, the unemployment rate was relatively unchanged due to this influx of new workers.  This inundation of workers could be at least partially symptomatic of Americans who felt previously left out by the current expansion beginning to feel better about their prospects of being hired. 

As Atlas mentioned in our Friday morning note, there were several hints within other indicators that this could be a strong report.  These elevated expectations might have led to disappointment if they went unfulfilled, but no letdown was not evident in the markets as the week ended.  America’s labor situation continues to be one of the highlights of its economy.