The U.S. economy added 235,000 non-farm payroll positions in February, according to today's monthly employment report released by the Bureau of Labor Statistics (BLS). This seasonally adjusted figure is -1.26 percent below January's downwardly revised addition of 238,000 jobs, but significantly exceeds the Wall Street Journal's expectation of 197,000.
Following a marginal rise to 4.8 percent last month, the unemployment rate declined to 4.7 percent in February, and the labor-force participation rate rose minimally from January's 62.9 percent, to 63.0 percent. February's strong report comes one week before the Federal Reserve's next policy meeting, and could have implications for potential home buyers if officials make the decision to raise short-term interest rates.
After making big headlines in December, when average hourly earnings made the largest 12-month gain since 2009, wage growth was an underwhelming aspect of January's report. The meager 0.1 percent rise in wages seen in January came as a surprise to many considering 2017 marked the start of minimum wage increases in 19 states. In February, all employees on private non-farm payrolls saw average hourly earnings increase 0.23 percent, or $0.06, to $26.09. While the figure falls short of economists expectations for a 0.3 percent monthly gain, any growth indicates an improving economy. According to the Wall Street Journal, "a pickup in wage growth [signals] a tightening job market [that] is forcing employers to raise pay to attract and retain workers, which could add to the Fed’s confidence that long-sluggish U.S. inflation is headed higher."
Job growth in the construction industry is continuing to gain momentum, adding 58,000 jobs in February. February's gains can primarily be attributed to job growth in heavy and civil engineering (+15,100), and specialty trade contractors (+36,400). Residential construction employment added 4,000 jobs, while non-residential construction employment saw a bump of 1,900 jobs. Overall, the construction industry has added 177,000 over the past six months. The manufacturing sector also saw continued gains, adding 28,000 jobs. Meanwhile, payrolls in the architectural and engineering services added 4,500 positions in February, marking the fourth consecutive month of growth.
Lawrence Yun, chief economist for the National Association of Realtors, reacted to the report with the following statement: “The boosts to business and consumer confidence over the past few months is evidently leading to faster hiring. The 235,000 net new job additions in February and 2.3 million over the past year will support home buying even in the face of higher mortgage rates. Moreover, the construction job gains of 58,000 is the best monthly showing in over a decade and implies less bottle-necking to home building in upcoming months."
Read the full release here.
From the BLS's historical data release: The BLS also releases detailed information subsets of key markets with a one-month lag, in this case offering more detailed information of the architectural and engineering services category's response to the broader economy's hiring slowdown, which began in June. The charts below highlight a monthly job-growth breakdown of the architectural services, landscape architectural services, and engineering and drafting services between January 2016 and January 2017. Details of these subcategories' performance in January will be revealed in next month's historical data release.