Five Things to Watch in the February Jobs Report

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Great quick synopsis from Sarah Chaney of the Wall Street Journal on the February Jobs Report:

The U.S. government releases its broad measure of the February labor market on Friday. Economists surveyed by The Wall Street Journal expect the Labor Department to report employers added 180,000 jobs while the unemployment rate ticked down to 3.9%. Here are five things to watch in the report.

Coming and Staying

A rising participation rate may reflect a labor market that has increasingly drawn in people from the sidelines. The most recent jobs report showed the share of American adults working or seeking work increased to 63.2%, up half a percentage point from a year earlier. Participation generally had fallen since the early 2000s, as the wave of women entering the labor force slowed and then baby boomers began to retire in greater numbers. But with many baby boomers staying in their jobs and prime-age workers — particularly millennial women — entering the labor force in droves, the overall rate has plateaued in recent years, defying expectations of demographic-driven declines.

Payrolls Pullback

Payrolls could cool after back-to-back months of blockbuster job growth. Economists are expecting 180,000 new jobs in February, after the economy added 304,000 and 222,000 jobs in January and December, respectively. A February pullback could mark the beginning of a widely expected slowdown — but job creation just under 200,000 indicates the job market is humming along and is solid.

Raise, Please

Has wage growth peaked? Average hourly earnings grew at an accelerating rate beginning in October 2017, but wage growth has eased in recent months, even as the unemployment rate has held at historically low levels. Watch Friday to see whether wages resume an upward climb, as well as for whom they’re rising fastest. In the past few months, nonsupervisory, or rank-and-file employees, have seen faster wage growth than all private employees.

Part-Time Payback

Keep an eye on the number of people working part time for economic reasons. The Labor Department said the half-million jump to 5.1 million involuntary part-time workers in January may have reflected the impact of the partial government shutdown. The spike in involuntary part-time work due to the shutdown should revert some, but part-time employment has been on the rise since August, raising the question of whether a more structural shift is at play.

Unemployment Rate

Watch for the unemployment rate to edge down in February. The government shutdown contributed to a January rise in temporary layoffs, leading the unemployment rate to tick up to 4.0%. That impact should reverse itself in February. Also, jobless claims, a proxy for layoffs, remained at historically low levels in February, a signal of labor-market strength. Economists expect the unemployment rate to clock in at 3.9%, a notch below 4.0% in January but up slightly from a 49-year low of 3.7% last fall.

Write to Sarah Chaney at sarah.chaney@wsj.com

  • 03/07/2019
  • Sarah Chaney