The February employment report could scarcely have been better from the perspective of multiple stakeholders. According to the Bureau of Labor Statistics’ preliminary February estimates, the nation added 313,000 net new positions over the course of the month. That would be remarkable for any month, but is particularly impressive for a month with only 28 days.
Moreover, the labor force participation rate blossomed to 63.0 percent, up 30 basis points from 62.7 percent a month prior. While still low by historical standards, the entry of hundreds of thousands of people (~ 800,000) into the labor force makes it more likely that U.S. employment will continue to expand, without triggering worrisome inflation. The share of people aged 25-54 in the labor force is at its highest level since 2008 when the economy’s deterioration began to accelerate.
Perhaps most remarkably, the intensification of hiring was not associated with sharper wage pressures. Even as the pace of employment growth picked up in February, average hourly earnings expansion on a year-over-year basis slipped to 2.6 percent. The combination of strong job growth and indications of softer wage growth propelled the Dow Jones Industrial Average up 441 points on March 9th, the date of the release.
Jobseekers were also likely to view February’s employment report positively. Hiring continues to be brisk and the official rate of unemployment remained at 4.1 percent despite the surge in labor force entry. Construction, manufacturing, and a variety of service categories chipped in jobs. The construction sector added 61,000 net new jobs, the highest tally for that sector in any month since 2007.
Business owners are also likely to be comforted by evidence of ongoing economic expansion and the availability of additional labor. It appears that the current economic recovery, now 104 months old and the third longest in American history, still has some room to run.