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US jobs, wages show solid gains in Trump's first month

Washington - US employers added jobs at an above-average pace for a second month on outsized gains in construction and manufacturing, showing the labour market continued its steady growth in the new year.

The 235 000 increase in jobs followed a 238 000 rise in January that was more than previously estimated, the best back-to-back rise since July, a Labour Department report showed on Friday in Washington. The unemployment rate fell to 4.7%, and wages grew 2.8% from February 2016.

While unseasonably warm weather may have boosted the payrolls count, the data represent President Donald Trump’s first full month in office and coincide with a surge in economic optimism following his election victory. The figures also validate recent comments by Federal Reserve officials that flagged a likely interest-rate increase this month.

“The economy is riding a wave of optimism in the wake of the election,” Andrew Chamberlain, chief economist of jobs website Glassdoor, said before the report was released.

Construction jobs, which can fluctuate depending on the weather, rose by 58 000, the most since March 2007, and followed a 40 000 increase in January. Manufacturing payrolls gained 28 000, a three-year high. Meanwhile, retail positions fell by 26 000, the most since December 2012.

Warm weather

Last month was the second-warmest February on record in the contiguous 48 US states, with an average temperature of 41 degrees Fahrenheit (5 degrees Celsius), about 7 degrees higher than the 20th century average, according to the National Oceanic and Atmospheric Administration.

Even so, the figures indicate that the drivers of consumer spending probably remain intact after purchases slowed in January, suggesting that any easing of first-quarter economic growth will be temporary. Fed Chair Janet Yellen said last week that the labor market is “in the vicinity of our maximum employment objective.”

At the same time, payroll gains are forecast to slow, owing to factors including employers’ difficulty filling positions and tepid growth in the working-age population. For the full year, economists project an average monthly increase of 171 000 jobs, according to a February survey.

Trump has set a goal of adding 25 million jobs over 10 years, which would require additions of 208 000 a month, or 2.5 million positions a year.

The median forecast in a Bloomberg survey of economists called for a 200 000 advance in February. Estimates ranged from gains of 150 000 to 275 000. January was initially reported as a 227 000 increase.

Revisions to the previous two months added a total of 9 000 jobs to payrolls.

The unemployment rate, which is derived from a separate Labour Department survey of households, fell as employment increased by 447 000. The jobless rate matched the median projection of 4.7%.

Participation rate

The participation rate, which shows the share of working-age people in the labour force, increased to 63%, the highest since last March, from 62.9%. It has been hovering close to the lowest level in more than three decades.

The number of people out of the labor force, a figure repeatedly highlighted by Trump as a sign of economic malaise, fell by 176 000 to 94.2 million.

Private employment, which excludes government agencies, rose by 227 000 after a 221 000 increase the prior month.

Government employment rose by 8 000. Federal payrolls increased by 2 000 in the first full month of the Trump administration’s hiring freeze for agency employees not involved in national security. State and local agencies added 6 000.

Average hourly earnings rose by 0.2% from the previous month. January’s year-over-year increase was revised up to a 2.8% gain. The average work week for all workers was unchanged at 34.4 hours.

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