An impressive 313,000 net new jobs were created in February 2018, the largest increase posted since July 2016. This exceeded the consensus estimate by 41 percent among economists polled by MarketWatch.
The net gain in jobs totaled 2.281 million in the prior 12-months at an average 190,100 per month. Total net job gains in the prior 12-months still significantly trails the 3.129 million level seen in February 2015, as shown in the following graph. Part of the decline can be attributed to a lack of skilled people to hire with the unemployment rate unchanged at a 17-year low of 4.1 percent.
The U.S. has now increased the total number of jobs 89 consecutive months on a seasonally adjusted basis. From the pre-recession peak in January 2008, total job loss was 8.693 million to the February 2010 trough. Since then, the U.S. has created 18.451 million net new jobs. Note: The Bureau of Labor Statistics has just restated employment data commencing in 1990.
Employment in the Leisure and Hospitality sector is an excellent proxy of the overall health index of the U.S. economy. People do not spend money on vacations, cruises, entertainment, spas or dinners out unless they feel good about the future economy. My premise is that the U.S. economic outlook is healthy as long as the employment growth rate in Leisure and Hospitality exceeds that of the country overall. Current Leisure and Hospitality job growth in the prior 12 months was 2.04 percent versus 1.56 percent for the total economy signaling continued strong consumer confidence.
Average hourly earnings, up 4 cents per hour in February 2018, increased 68 cents in the past 12-months, a gain of 2.6 percent. Hourly earnings monthly since 2012 are shown in the following graph.
The strong job formation rate in February is shown in a comparison to the two prior years in the following graph.
Other items in the February 2018 jobs report:
- Number of Persons Unemployed for Less Than 5 Weeks increased by 228,000 from January to 2.508 million
- Long-Term Unemployed (jobless for 27 or more weeks), now at 1.397 million, was down 24,000 from January 2018 and down 369,000 versus a year ago
- Civilian Labor Force Participation Rateis now 63.0 percent, essentially unchanged from a year ago
- Employment-Population Ratiois now 60.4 percent versus 60.0 percent a year ago – the bigger the better
- Number of Persons Employed Part Time for Economic Reasons(also known as involuntary part-time workers) are individuals desiring full-time employment but either had their hours cut back or cannot find a full-time job), increased by 171,000 from January to February, but is down 510,000 from a year ago to 5.160 million
- Marginally Attached to the Labor Force(not currently counted in the labor force, want and are available for work and had looked for a job in the prior 12 months) is down by 121,000 in the past year to 1.602 million. Within that group, 373,000 were classified as Discouraged Workers – persons not currently looking for work because they believe there are no jobs available for them. Discouraged Workers have shrunk by 149,000 in the past 12 months
- Manufacturing added 31,000 net new jobs in February 2018 and 224,000 new jobs in the latest 12-months. The segment accounts for one-in-12 of all jobs in the U.S.
- Health Care gained 19,000 jobs in February and added an average 24,400 each month in the past 12-months. Healthcare makes one-in-ten of all U.S. jobs
- Construction added 61,000 jobs in February and 185,000 in the latest four months.
- Leisure and Hospitality jobs increased by 16,000 jobs in February and were up 325,000 in the past 12-months
- Retail Trade added an impressive 50,000 jobs in February (all employment numbers on a seasonally adjusted basis)
- Mining and Logging (which includes oil and gas) added 9,000 net new jobs in February as oil prices remained in the $60 per barrel range
- Professional and Business Services posted a 495,000 gain in employment in the past 12-months, including 50,000 in February
To read the entire BLS release along with detailed tables click https://www.bls.gov/news.release/pdf/empsit.pdf
The U.S. economy had an impressive month in February 2018, just one-month into the economic stimulus of the 2017 Tax Cut and Jobs Creation Act.