February jobs report points to resilient US economy
WASHINGTON — U.S. employers added 235,000 jobs in February and raised pay at a brisk pace — signs a resilient economy has given many companies the confidence to hire in anticipation of solid growth ahead.
With the unemployment rate dipping to a low 4.7 percent from 4.8 percent, the job market appears to be fundamentally healthy or nearly so.
Friday’s employment report from the government showed more people began looking for jobs last month, an encouraging sign that they’ve grown confident about their prospects. Hiring was strong enough to absorb those new job seekers as well as some of the previously unemployed.
The picture of an economy on solid footing nearly eight years after the Great Recession ended has made it all but certain the Federal Reserve will raise interest rates next week and signal the likelihood of additional rate hikes ahead.
February’s jobs report was the first to cover a full month under President Donald Trump. During the presidential campaign, Trump had cast doubt on the validity of the government’s jobs data, calling the unemployment rate a “hoax.”
But just minutes after the report was released at 8:30 a.m. Eastern time, Trump retweeted a news report touting the job growth.
Later in the day, his spokesman, Sean Spicer, quoted Trump as saying of the jobs reports: “They may have been phony in the past, but they are very real now,” a comment that incited laughter, including from Spicer himself, during a press briefing.
Economists were mainly encouraged by the employment data.
“It’s hard to find much to dislike in the February jobs report,” said Michael Feroli, an economist at JPMorgan Chase, said.
About a quarter of the job gains occurred in construction, which added 58,000 jobs, the most in a decade. Unseasonably warm weather likely inflated that figure, economists said. Last month was the second-warmest February since 1895, according to the Commerce Department.
Some economists cautioned that last month’s outsized job gains might be hard to sustain. If warm weather did help elevate construction hiring in February, for example, it might subtract from job growth that normally would occur in early spring.
“There will probably be some weather payback in March,” Ted Wieseman, an economist at Morgan Stanley, said in an email.
Mining, which includes oil and gas drilling, added 7,700 jobs last month, the most in nearly three years. Energy companies have increased drilling in response to higher oil prices, reversing nearly two years of job losses. Oil prices have dropped this week, though.
And as unemployment declines, hiring typically slows as the pool of available workers shrinks. Many small businesses are complaining that they cannot find workers with the qualifications they need. This trend could weigh on hiring in coming months.
Stock prices fluctuated throughout the day Friday, and the Dow Jones industrial average closed up a modest 44 points.
The February jobs data likely provided the final piece of evidence the Fed needed to raise rates after its next policy meeting Wednesday. It would be the Fed’s third rate hike in 15 months. The Fed’s inclination to tighten borrowing rates reflects how far the economy has come since the central bank cut its benchmark short-term rate to zero in 2008 and kept it there for seven years to support a fragile economy.
In December, Fed policymakers had forecast that they would raise rates three times this year. Those increases could lead eventually to higher loan rates for homes and cars as the economy further solidifies its gains. Economists said Friday’s hiring data increases the probability of additional rate hikes.