Economists were predicting gains of 152,000 jobs, and unemployment falling from 6.6 percent to 6.5 percent. This morning’s jobs report, on the other hand, showed 175,000 added jobs, and a slightly higher unemployment rate of 6.7 percent. Add that to an ADP report on Wednesday that was worse than expected and you have a fairly confusing picture of the economy. So what the heck is going on here?
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Former Obama administration economist Jared Bernstein says on his blog that he remains “concerned that the pace of job growth may have downshifted in recent months,” citing stagnation in the healthcare sector, which has gained only 18,000 jobs over the past three months, as opposed to average gains of 20,000 each month for the past few years.
Bad Weather Might Still Be a Factor
Despite the higher jobs number, some economists still pointed to the weather as impacting job recovery, and made cautious predictions for more growth in the spring.
“The US has suffered from unusually bad weather in recent months, which has contributed to a recent slowdown in the labor market,” says Joseph Lake, US Analyst for The Economist Intelligence Unit. (Via Forbes.) “The acceleration in job growth in February suggests that, despite this recent softening, the US is continuing to make slow, fitful progress as it recovers from the worst recession since the Great Depression.”
The Bureau of Labor Statistics notes that the weather can have an effect on both the establishment and household surveys which comprise the basis for the report. In its FAQ, however, the Labor Department cautions that is was “not possible to quantify the effect of extreme weather on estimates of over-the-month change in employment” — in part, because while some workers might be forced to stay home and go without pay during bad weather, others (e.g. snowplow operators) work more during a blizzard than they do during the rest of the year.
Still, CNNMoney surveyed economists who said that job growth could have been as much as 193,000, if bad weather hadn’t intervened — lower than the average of 205,000 jobs added each month for most of 2013, but still better than we’ve been seeing this long, cold winter.
Where Are the Jobs?
The biggest job gains were in professional and business services, according to the Labor Department’s release, while the information sector lost jobs.
The big gainers include:
- Professional and business services: +79,000 jobs
- Accounting and bookkeeping services: +16,000 jobs
- Temporary help services: +24,000 jobs
- Services to buildings and dwellings: +11,000
- Wholesale trade: +15,000 jobs (+12,000 jobs in durable goods)
- Food services and drinking places: +21,000 jobs
Construction, healthcare, and retail trade changed little as a whole. Mining and logging, manufacturing, transportation, financial activities, and government, also held steady, with no significant gains or losses.
Information lost 16,000 jobs last month, mostly in motion picture and sound recording (-14,000). The BLS notes that “employment in this industry can be volatile from month to month.”
Unemployment and Wage Growth
The unemployment rate remained essentially unchanged, as it has since December, although 37 percent of the jobless were long-term unemployed. The number of workers who have been unemployed for 27 weeks or more increased by 203,000 in February to 3.8 million.
Finally, average hourly earnings rose by 9 cents to $24.31; over the past year, that number has grown by 2.2 percent to 52 cents. According to The PayScale Index, wages are expected to grow 0.7 percent during the first quarter of 2014.
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