Jobs increased by 175,000 in February, and the unemployment rate was little changed at 6.7 percent, the U.S. Bureau of Labor Statistics stated today. February’s unemployment rate rose 0.1 points to 6.7 percent. The labor force participation rate of 63% remains at its lowest level since 1978.
Below average growth, winter storms blamed
February’s job growth is below the last twelve-month average of 189,000. Many news reports touted this below-average growth as a good sign because the economy grew despite the bad weather in February. News writers apparently failed to read the full news BLS news release. A footnote to the release explains how it is unlikely a winter storm could change BLS employment survey results.
Short-term growth in temporary help and food service jobs
Professional and business services and food and drink accounted for more than half of the total non-farm employment increase in February. Professional and business services hired 79,000. This is largely due to increases in temporary help services hiring 24,000 and accounting and bookkeeping services adding 16,000. In fact, professional and business services continues to set the pace with 56,000 jobs added every month over the prior 12 months. Food services and drinking places hired 21,000 more people in February while wholesale trade added 15,000 to their payroll.
The new economy: temporary jobs, food services and retail
The emerging economic growth picture indicates professional and business services is growing most rapidly 672,000 with new jobs over the last twelve months. Employment in food services and drinking places continued to trend up in the prior 12 months, adding 324,000. Retail trade added 282,000. Construction has also begun to grow this year adding 152,000 jobs.
Weather’s impact may be over-rated
Most news services reported job growth was in spite of winter storms. The relationship may be overstated. As the BLS explains in footnotes to its press release, unusually severe weather greatly influences hours estimates but not so much employment estimates. The survey samples only the 12th day of the month. Therefore, unusually severe weather “typically, but not always, results in a reduction in average weekly hours. (But) in order for severe weather conditions to reduce the estimate of payroll employment, (hourly) employees have to be off work without pay for the entire pay period.” The weather effect is even more minimized by the fact that employees paid by the hour comprise only 20 percent of the survey.