February was another great month for the job market as this month’s jobs report shows. Employers added 242,000 workers last month and unemployment held steady at 4.9 percent. That’s around 50,000 more jobs than economists were expecting. Employment gains have averaged 543,000 a month since December, the biggest increase in 16 years. It’s clear that businesses are unafraid of growth, despite the uncertain economic climate and weak growth across the globe. Let’s take a look at some of the details.
Who Is Adding Jobs?
The healthcare industry led the way last month, with 57,000 new jobs. Next up were retail and bars and restaurants, which added 55,000 and 44,000 workers, respectively. The construction industry added 16,000 jobs, despite the season, but mining-related industries lost 19,000 workers.
The majority of new jobs went to part-time employees — those jobs grew by 489,000. Full-time workers saw a slower increase with just 65,000 new jobs.
More Good News For The Labor Market
According to the February jobs report, not only did the unemployment rate remain at its eight-year low of 4.9 percent, but the broader U-6 rate — which includes under-employment and people not actively looking for jobs — came in at 9.7 percent in February. That number was 9.9 percent in January, and 11 percent last February. It’s the lowest number since May 2008. The civilian labor force participation rate increased 62.9 percent in February to 555,000. This signals that people are re-joining the labor market as jobs pick up.
The Wages Problem… Or Is It?
The jobs data wasn’t all positive. Wages fell 0.1 percent last month, after a promising increase of 0.5 percent in January, and the average length of the workweek declined by 0.2 hours. Some economists view this as a signal that the market may not be as healthy as people want to think it is, and that the workforce has yet to clearly benefit from the tightening labor market, but others see these numbers as evidence that there is still room for growth.
What Does This Mean for Employers?
The pool of available workers may be shrinking, which could give applicants the upper hand when negotiating terms of employment. On the other hand, more and more people seem to be joining the labor market. The participation rate — measuring the number of working-age people who are employed or looking for work — has grown steadily over the last three months.
Good news, right? Maybe. More people means the pool is getting bigger, but the jobs are definitely out there, so people aren’t looking for work for long. And as people see friends and family snapping up jobs, they’re encouraged to get back into the game as well. The pool keeps getting bigger, but it remains to be seen whether it will get big enough for employers to have the upper-hand during the hiring process.
From the data, it’s likely that full-time employers will have more hiring options than those looking for part-time workers, because full-time jobs increased only modestly last month. But that may soon change. With such a strong labor market and businesses charging ahead with growth even in the midst of a global slowdown, employers could be the ones chasing the talent, at least in the short-term.