Economy adds 313K jobs in February, most since July 2016
The U.S. economy added a robust 313,000 jobs in February, the fastest pace of growth since summer of 2016, as tax cuts stoked the tightening labor market.
The unemployment rate was 4.1 percent for the fifth straight month, the lowest level since December 2000, when it was 3.9 percent, the Labor Department reported on Friday.
February jobs, which ran well above estimates, posted the best performance since July 2016 and were up from 239,000 jobs in January.
Job gains have averaged 242,000 over the last three months.
The boost in jobs last month likely reflects a growing confidence among businesses that the tax cuts will help accelerate growth this year.
The White House’s Council of Economic Advisers recently predicted economic growth of 3 percent this year and into the next decade.
The Dow Jones industrial average opened up about 150 points higher on the jobs news.
Employment, as measured in the household survey, rose by a massive 785,000, the biggest monthly gain since September.
The labor force increased by 806,000, which is the biggest jump since January 2003, bolstering the labor force participation rate to 63 percent from 62.7 percent, the highest level since September.
Wage acceleration slid to a 2.6 percent annual pace from a 2.8 percent in January. That January figure was revised down 0.1 percentage point and had roiled markets.
House Democratic Leader Nancy Pelosi said while February’s report shows jobs growth, “working Americans are still not getting the bigger paychecks they deserve.”
“Strong job growth means little to the American workers forced to work multiple jobs because of stagnant wages,” Pelosi said.
Robert Frick, a corporate economist with Navy Federal Credit Union, called the February report “mixed,” noting the wage increases were lower than expected despite the strong job gains and a jump in labor force participation.
“Together that says that there is still slack in the labor force and Americans are still waiting for bigger raises that are typical for this point in an economic expansion,” Frick said.
The household survey is an estimate of employed Americans, not of total jobs, and covers those who wouldn’t show up on a payroll, such as the self-employed.
The labor market is expected to tighten further this year and economists forecast that the jobless rate could drop into the historic mid-3 percent range.
Employees’ paychecks are expected to grow as the labor market tightens this year.
“Although the unemployment rate held steady over the month, it will fall throughout 2018 and into 2019 as the job market continues to tighten, bottoming out at around 3.5 percent,” said Gus Faucher, chief economist for PNC.
“Businesses and consumers are likely responding to the tax cut by boosting investment and spending, driving stronger demand and increasing the need for labor,” Faucher said.
The latest positive jobs growth comes amid President Trump’s plan to levy global steel and aluminum tariffs that congressional Republicans have said they worry could upend the economic momentum from the tax package.
The Trade Partnership, a nonpartisan pro-trade group, estimates that the tariffs will generate more than 33,000 new metals jobs but ultimately lead to an overall loss of 146,000 jobs.
House Ways and Means Committee Chairman Kevin Brady (R-Texas), an architect of the tax plan, credited the newly enacted law with bolstering the job market and economic growth.
But he has expressed concern about the president’s tariff plan.
“Now is the time to build off the strong economic momentum of the president’s tax cuts through sound trade policy,” Brady said.
“We must ensure that the steel and aluminum tariffs just announced by the president are narrowly targeted and don’t harm our workers and manufacturers here at home,” he said.
Trump on Thursday officially announced tariffs of 25 percent on steel and 10 percent on aluminum from all nations except Canada and Mexico. Other countries can apply for exemption from the tariffs as well.
Overall, there were 54,000 more jobs created in December and January than initially reported.
Employers have added jobs for 89 straight months.
Manufacturing, a key focus of Trump’s tariffs plan, added 31,000 jobs in February and has generated 224,000 jobs over the past year.
Construction employment increased by a solid 61,000 and the sector has added 185,000 jobs over the past four months.
The economy added 287,000 private sector jobs in February, while 26,000 government jobs were added.
Employment in mining rose by 9,000 in February and is up 69,000 since a recent low in October 2016.
Retail trade saw a big boost in employment, up 50,000.
Employment in health care rose 19,000 and the industry is up 290,000 jobs over the past year.
Updated at 9:52 a.m.