The Labor Department released last month’s employment figures Friday morning, and the report shows U.S. employers continued the high pace of hiring last month as the unemployment rate dropped, although wage gains continue to plod along at a slow, but steady, rate. All this points to an improving labor market and a boost in the broader economy more than five years after the recession.
Here are the highlights from this morning’s report.
What you need to know: February was the 53rd straight month of employment gains in the U.S., and the 12th straight month of job additions above 200,000.
The job market has been steadily improving, which is good news. However, on the downside, hourly wages are still sluggish, and the number of long-term unemployed remains almost 50% higher than it was before the recession hit.
Hourly wages advanced 2%, falling short of the 2.2% gains logged in January. Those two months still fall short of the 3% annual wage growth seen prior to 2007. While employers have picked up their hiring, they’ve been less apt to boost pay. Economists and regulators have been anxiously waiting for wages to pickup, a key indicator for when the Federal Reserve may raise interest rates.
The Fed, which had continually worried that the labor market is not as healthy as it hoped nearly seven years after the start of the Great Recession, is much more optimistic these days.
“The employment situation in the United States has been improving on many dimensions,” Yellen told the Senate Banking Committee in February. Spending and production have grown at a “solid rate,” and should continue to help drive the economy forward as unemployment steadily falls, she added.
Given the employment gains and as officials become more confident that inflation will start moving toward the Fed’s 2% target, Fed officials are warming to the idea of an interest rate boost as soon as mid-year. However, Yellen’s comments indicate that no policy change is likely to come out of the Fed’s March or April meetings.
The big numbers: The U.S. labor market added 295,000 jobs in February, surpassing economists’ estimates of 235,000 jobs, according to Bloomberg data. The nation’s unemployment rate fell to 5.5% from 5.7% in January and beat analysts’ estimates of 5.6%.
Job gains for January were revised down. January fell to 239,000 from 257,000 jobs. November through January represented the best three-month gain for the labor market since the late 1990s.
The number of long-term unemployed was little changed at 2.7 million.
What you may have missed: February continues to builds on a standout streak of job growth over the past several months, capping off 2014 with 3 million new workers and jumpstarting gains for 2015.
Those gains have continued into February despite brutal weather across the U.S. New England has been digging itself out from a seemingly never-ending string of snow storms, and Chicago logged the coldest February since 1875, according to the National Weather Service. The southeast has also been hit with frigid weather, causing a number of canceled school days. All this adds up to a curtailment in weather-sensitive industries like construction and, often, retail.
Some of the biggest job gains last month went to the food services and professional services sectors, which added 59,000 and 51,000 jobs, respectively. Healthcare employment also ticked up on a seasonal basis by 24,000.