Economists predicted gains of 240,000 jobs for February, but this morning’s release from the Bureau of Labor Statistics beat expectations with 295,000 jobs added, and an unemployment rate that declined 0.2 points to 5.5 percent — the lowest in six and a half years.
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Employment increased in food services and drinking places (+59,000 jobs), professional and business services (+51,000 jobs), construction (+29,000 jobs), healthcare (+24,000 jobs), transportation and warehousing (+19,000 jobs), retail trade (+32,000 jobs), and manufacturing (+8,000 jobs). Employment in mining decreased by 9,000 jobs, and remained flat in wholesale trade, information, financial activities, and government.
Last month’s numbers were revised downward 18,000, to 239,000 jobs added.
Average hourly earnings grew a modest 3 cents in February, and wages overall have grown 2 percent over the past year. The PayScale Index, which tracks the change in wages of employed U.S. workers, predicts a 1.7 percent growth for the first quarter of 2015.
“The lack of wage growth has proven the biggest mystery of the economic upturn,” writes Chico Harlan at The Washington Post. “Normally, a tighter labor market forces employers to compete for employees — and raise their pay. But so far, there has been no sign of upward pressure on wages, despite months of predictions that an improvement is just around the corner.”
There are indications, however, that wages might change. In an interview with The Street, Mark Zandi, chief economist of Moody’s Analytics, points to the December strike at the West Coast ports as a sign that the labor market is gaining strength.
“That doesn’t happen in a world where the labor market is soft,” he said.
Zandi also predicted that while job numbers hovering around 300,000 aren’t likely to continue, 200,000-plus jobs per month will, and that as unemployment and underemployment decrease, workers will be able to demand larger pay increases, ultimately boosting wages.
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