US Shows Strong Job Gains in February But Hourly Earnings Unchanged Despite Surging Inflation

US February nonfarm payrolls rose by 678,000 (consensus 400,000). The 3-month average for total nonfarm payrolls rose to 582,000 from 572,000. February unemployment rate was 3.8% (consensus 3.9%), versus 4.0% in January. In the face of surging inflation February average hourly earnings were unchanged (consensus 0.5%) versus a downwardly revised 0.6% increase (from 0.7%) in January.

Working

December 2021 U.S. Employment Report

After Covid-19 virus threatened the global economy, war and inflation threatens any recovery again.  Is this Deja vu? As the world’s economy was shut down and much of America had stay at home orders the threat of Omicron is causing a nervous reminder of those dark days. Jobless claims numbers have been improving but unfortunately the story is much worse as people have not all been able to return to work with jobs replaced or been left devastated from lost income.

The market had expected the February report released Friday to show nonfarm payrolls rise 400k new jobs which it beat with 678k new jobs.  The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50-year low 3.5% with higher participation before the Covid-19 lockdown now to 4.0%.

US Jobs Report

January 2022 US Employment Report & Expectations

Employment:

  • US Change in Nonfarm Payrolls Feb: 678K (est 423K; prev 467K; prevR 481K)
  • US Unemployment Rate Feb: 3.8% (est 3.9%; prev 4.0%)
  • US Labour Force Participation Rate Feb: 62.3% (est 62.2%; prev 62.2%)
  • US Underemployment Rate Feb: 7.2% (prev 7.1%)
  • Two-month net revision +92K
  • US Change in Private Payrolls Feb: 654K (est 400K; prev 444K; prevR 448K)
  • US Change in Manufacturing Payrolls Feb: 36K (est 24K; prev 13K; prevR 16K)
  • Change in Government Payrolls little or no change over the month.
  • U6 underemployment rate 7.2% vs 7.1% prior
  • Long-term unemployed at 1.70m vs 2.0m prior (vs 1.2m pre-pandemic)
  • The employment-population ratio 59.7% vs 59.5% prior (61.1% before pandemic)
  • US Average Hourly Earnings (Y/Y) Feb: 5.1% (est 5.8%; prev 5.7%; prevR 5.5%)
  • US Average Hourly Earnings (M/M) Feb: 0.0% (est 0.5%; prev 0.7%; prevR 0.6%)
  • US Average Weekly Hours All Employees Feb: 34.7 (est 34.6; prev 34.5; prevR 34.6)

The unemployment rate and number of unemployed persons prior to the coronavirus (COVID-19) pandemic was 3.5 percent and 5.7 million, respectively, in February 2020)

United States Non Farm Payrolls

Where the Jobs Were:

  • leisure and hospitality, +179K with foodservice and drinking places plus 124K and accommodations +28K
  • professional business services +95K
  • healthcare rose 64K
  • construction +60K
  • transportation and warehousing +48K
  • retail trade +37K
  • manufacturing +36K
  • financial activities +35K
  • Government +24K
  • Wholesale Trade +18K
  • other industries +25K
  • mining employment +9K

Labour shortages continue to weigh even after federal government-funded unemployment benefits have expired and schools reopened. Some investors believe such shortages could get worse due to the White House’s vaccine mandate.

Private Jobs

United States Nonfarm Payrolls - Private

Government Jobs

 

United States Government Payrolls

Manufacturing Jobs

United States Manufacturing Payrolls

 

 Wages Monthly

United States Average Hourly Earnings MoM

Wages Yearly

United States Average Hourly Earnings YoY

 Hours

United States Average Weekly Hours

 


  Household Survey Data

In February, the unemployment rate edged down to 3.8 percent, and the number of unemployed
persons edged down to 6.3 million. In February 2020, prior to the coronavirus (COVID-19) pandemic,
the unemployment rate was 3.5 percent, and the number of unemployed persons was 5.7 million.

In February, the unemployment rate edged down to 3.8 percent, and the number of unemployed
persons edged down to 6.3 million. In February 2020, prior to the coronavirus (COVID-19) pandemic,
the unemployment rate was 3.5 percent, and the number of unemployed persons was 5.7 million.

Among the major worker groups, the unemployment rates for adult men (3.5 percent) and Hispanics
(4.4 percent) declined in February. The jobless rates for adult women (3.6 percent), teenagers (10.3
percent), Whites (3.3 percent), Blacks (6.6 percent), and Asians (3.1 percent) showed little or no change
over the month. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number of persons on temporary layoff, at 888,000 in February, was little
changed over the month. The number of permanent job losers, at 1.6 million in February, also changed
little. Both measures are higher than their February 2020 levels of 780,000 and 1.3 million, respectively.

In February, the number of persons jobless less than 5 weeks declined by 286,000 to 2.1 million. The
number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at
1.7 million. This measure is 581,000 higher than in February 2020. The long-term unemployed
accounted for 26.7 percent of the total unemployed in February 2022.
The labor force participation rate, at 62.3 percent in February, changed little over the month. The
employment-population ratio edged up to 59.9 percent. Both measures remain below their February
2020 levels (63.4 percent and 61.2 percent, respectively).
The number of persons employed part time for economic reasons increased by 418,000 to 4.1 million
in February but remains below its February 2020 level of 4.4 million. These individuals, who would
have preferred full-time employment, were working part time because their hours had been reduced or
they were unable to find full-time jobs.
The number of persons not in the labor force who currently want a job declined by 349,000 to 5.4
million in February. This measure is above its February 2020 level of 5.0 million. These individuals
were not counted as unemployed because they were not actively looking for work during the 4 weeks
preceding the survey or were unavailable to take a job.
Among those not in the labor force who wanted a job, the number of persons marginally attached to
the labor force, at 1.5 million, changed little in February. These individuals wanted and were available
for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4
weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached
who believed that no jobs were available for them, was little changed over the month at 391,000.

Household Survey Supplemental Data

In February, 13.0 percent of employed persons teleworked because of the coronavirus pandemic,
down from 15.4 percent in the prior month. These data refer to employed persons who teleworked or
worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the
pandemic.
In February, 4.2 million persons reported that they had been unable to work because their employer
closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at
some point in the 4 weeks preceding the survey due to the pandemic. This measure is down from 6.0
million in the previous month. Among those who reported in February that they were unable to work
because of pandemic-related closures or lost business, 20.3 percent received at least some pay from
their employer for the hours not worked, down from 23.7 percent in January.

Among those not in the labor force in February, 1.2 million persons were prevented from looking for
work due to the pandemic, down from 1.8 million in the prior month. (To be counted as unemployed,
by definition, individuals must be either actively looking for work or on temporary layoff.)
These supplemental data come from questions added to the household survey beginning in May 2020 to
help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables
with estimates from the supplemental questions for all months are available online at
www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.


Establishment Survey Data

Total nonfarm payroll employment rose by 678,000 in February but is down by 2.1 million, or 1.4
percent, from its pre-pandemic level in February 2020. Job growth was widespread over the month, led
by gains in leisure and hospitality, professional and business services, health care, and construction.

  • Employment in leisure and hospitality continued to increase, with a gain of 179,000 in February. Job growth occurred in food services and drinking places (+124,000) and in accommodation (+28,000). Since February 2020, employment in leisure and hospitality is down by 1.5 million, or 9.0 percent.
  • Professional and business services added 95,000 jobs in February. Job gains occurred in temporary help services (+36,000), management of companies and enterprises (+12,000), management and technical consulting services (+10,000), and scientific research and development services (+8,000). Employment in professional and business services is 596,000 higher than in February 2020, largely in temporary help services (+240,000), computer systems design and related services (+154,000), and management and technical consulting services (+152,000).
  • Employment in health care rose by 64,000 in February. Job gains occurred in home health care services (+20,000), offices of physicians (+15,000), and offices of other health practitioners (+12,000). Employment in health care is down by 306,000, or 1.9 percent, from its level in February 2020.
  • Construction added 60,000 jobs in February, following little change in the prior month. About three/fourths of the over-the-month job gain occurred in specialty trade contractors, with increases in both the residential (+24,000) and nonresidential (+20,000) components. Construction employment is slightly below (-11,000) its February 2020 level.
  • Employment in transportation and warehousing increased by 48,000 in February and is 584,000 higher than in February 2020. Over the month, job gains continued in warehousing and storage (+11,000), couriers and messengers (+9,000), support activities for transportation (+9,000), and air transportation (+7,000). All four of these component industries have surpassed their February 2020 employment levels, with particularly strong job growth in warehousing and storage (+420,000) and couriers and messengers (+240,000).
  • Employment in retail trade rose by 37,000 in February, with gains in building material and garden supply stores (+12,000), furniture and home furnishings stores (+6,000), and gasoline stations (+5,000). Retail trade employment is 104,000 above its level in February 2020.
  • Manufacturing added 36,000 jobs in February. Employment in durable goods industries rose by 20,000, with job gains in fabricated metal products (+11,000), machinery (+8,000), electrical equipment and appliances (+4,000), nonmetallic mineral products (+3,000), furniture and related products (+3,000), and primary metals (+3,000). These gains were partially offset by a job loss in motor vehicles and parts (-18,000). Nondurable goods manufacturing also added jobs over the month (+16,000). Since February 2020, manufacturing employment is down by 178,000, or 1.4 percent.
  • In February, employment in financial activities rose by 35,000. Job gains were split between finance and insurance (+16,000) and real estate (+16,000). Employment in financial activities is 31,000 above its level in February 2020.
  • Social assistance added 31,000 jobs in February, with a gain of 21,000 jobs in individual and family services. Since February 2020, employment in social assistance is down by 152,000, or 3.5 percent.
  • Employment in creased by 25,000 in the other services industry in February, led by a gain in repair andmaintenance (+10,000). Employment in the other services industry is down by 317,000, or 5.3 percent, from its level in February 2020.
  • Wholesale trade added 18,000 jobs in February; employment in the industry is 113,000, or 1.9 percent, lower than in February 2020.
  • Mining employment rose by 9,000 in February, with gains in support activities for mining (+6,000) and in oil and gas extraction (+2,000). Mining employment has grown by 62,000 since a recent low in February 2021.
  • Employment showed little or no change over the month in information and government.

Earnings

  • Average hourly earnings for all employees on private nonfarm payrolls, at $31.58 in February, were little changed over the month (+1 cent), after large increases in recent months. Over the past 12 months, average hourly earnings have increased by 5.1 percent. In February, average hourly earnings of private sector production and nonsupervisory employees rose by 8 cents to $26.94.
  • The average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.7 hours in February. In manufacturing, the average workweek for all employees increased by 0.4 hour to 40.7 hours, and overtime rose by 0.2 hour to 3.6 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was up by 0.1 hour to 34.1 hours.


The change in total nonfarm payroll employment for December was revised up by 78,000, from
+510,000 to +588,000, and the change for January was revised up by 14,000, from +467,000 to
+481,000. With these revisions, employment in December and January combined is 92,000 higher than
previously reported. (Monthly revisions result from additional reports received from businesses and
government agencies since the last published estimates and from the recalculation of seasonal factors.)


The Employment Situation for March is scheduled to be released on Friday, April 1, 2022, at 8:30
a.m. (ET).


Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk