The U.S. economy added a better-than-expected 242,000 jobs in February while the unemployment rate held steady at 4.9 percent. Economists were expecting 190,000 new positions and no change in the jobless figure.
Despite the strong headline number, the closely watched average hourly wages actually declined for the month, falling three cents and equating to a 2.2 percent annualized jump, down from 2.5 percent in January. Fed policy makers are looking at wages for evidence of inflation. The average hourly work week also declined 0.2 hours to 34.4.
The bulk of job gains came from health care, retail and bars and restaurants, which added 57,000, 55,000 and 40,000 new positions respectively. Construction also added 19,000. Mining-related industries lost 19,000 jobs.
Job quality was titled toward part-time, which the household survey indicated grew by 489,000, while full-time positions increased by just 65,000.
A separate unemployment gauge that includes those not actively looking for a job or at work part-time for economic reasons fell to 9.7 percent, the lowest reading since May 2008. A declining labor force participation rate had played a big role in the decline of the headline jobless number, but the gauge rose in February to 62.9 percent, its highest level since January 2015, as the civilian labor force increased by 555,000.
“The report says that we have a healthy economy and it’s beginning to get people back into the market. But it’s not pressuring wages yet,” said William E. Spriggs, chief economist at the AFL-CIO. “We need everyone to be aware that our wages have not rebounded, so we still have a ways to go before the labor market is really tight.”
The figures come amid a turbulent time both for the economy and financial markets. Despite the recent stock rally, the S&P 500 is still down about 2.5 percent for 2016.
Federal Reserve officials are looking for wage-driven inflation as a trigger to continue policy normalization. The U.S. central bank in December enacted a quarter-point hike in its interest rate target, the first such move in more than nine years. Though members of the Federal Open Market Committee indicated back in November that four rate hikes would be likely this year, Wall Street is expecting a much slower pace as economic growth has disappointed. Traders assign just a 2 percent chance to a March rate hike, with December being the first month that has a more than 50 percent chance, according to the CME. Revision to previous months added 30,000, with December going from 262,000 to 271,000 and January pushed up to 172,000 from 151,000. This article first appeared on CNBC.com.
Jeff Cox, CNBC Recommended
