A worker throwing dyed raw fiber into the drying machine at G.J. Littlewood & Sons Inc. in Philadelphia. PHOTO: HANNAH YOON/BLOOMBERG NEWS
U.S. Economy Added 273,000 Jobs in February
| le 6 March 2020
Jobless rate ticks down to 3.5%; impact of coronavirus on economic data has been muted so far
Employers added 273,000 jobs in February and the jobless rate was 3.5%, signs of labor-market strength before the coronavirus spread in the U.S.
Wages increased 3.0% from a year earlier in February, in line with recent months.
Economists surveyed by The Wall Street Journal had forecast February job growth of 175,000, an unemployment rate of 3.5% and year-over-year wage growth of 3.0%.
Most companies reported their February employee head counts before cases linked to the virus rose in the U.S. and other countries outside of China, triggering fears the epidemic would hit global and U.S. economic growth.
The Federal Reserve cut interest rates by a half-percentage-point Tuesday, one of several global central-bank efforts to support economic growth amid uncertainty about the virus’s effects.
Some companies have expressed concern in recent days about the business impact of the virus and the global economic slowdown. United Airlines Holdings Inc. announced a hiring freeze through the end of June as the spread of the virus depressed bookings. Hyatt Hotels Corp. also froze hiring at some properties as the growing coronavirus outbreak dampens demand for travel.
While virus-related uncertainty could lead to a wider slowdown in hiring in future months, many employers are still reluctant to cut workers given the virus could soon pass and the labor market remains tight. Jobless claims, a proxy for company layoffs, declined to 216,000 last week, a historically low level.
Gigi Schweikert, president of child-care franchise Lightbridge Academy, said the virus isn’t impeding hiring plans. The 1,600-employee company is looking to add nearly 400 teachers and directors this year as franchises expand near growing populations of dual-income earners.
“It’s still extremely difficult to hire,” she said. “With the unemployment rate as low as it is, there are fewer candidates who are available for the positions.”
The jobless rate has clocked in at either 3.5% or 3.6% for the past six months, marking the lowest level of joblessness since 1969.
The U.S. economy gained an average of 243,000 jobs a month from December through February, up from average monthly job growth of 178,000 in 2019.
The sectors where demand would suffer the most from the spread of the virus include air transportation, and those that rely on discretionary spending in public places, such as restaurants, entertainment and retail, according to economic research firm Capital Economics.
“Businesses that are primarily dine-in businesses may need to close temporarily if things get really bad,” said Erik Herrmann, head of restaurant investment at CapitalSpring, which invests in and owns several fast-food and fast-casual restaurants.
Mr. Herrmann expects drive-through services to benefit if the coronavirus spurs greater hesitancy among customers to eat inside restaurants.
Dozens of job openings have popped up in health-care and science roles, as some companies add coronavirus-specific positions, according to an analysis by job-posting site Glassdoor. This includes a posting for a microbiologist to assist with coronavirus testing in Austin, Texas, and another for registered nurses to conduct coronavirus screenings in Fairfield, Calif.
The impact of the virus on economic data has been muted so far, but most private-sector and government economic surveys were conducted before concerns of the infection’s potential economic effect rose in late February. February’s payroll gain of 273,000 suggests the U.S. economy was on strong footing preceding these escalating anxieties.
Last month, industries including health care, restaurants and construction added jobs at a robust clip. Federal government employment rose, mainly reflecting 7,000 new temporary Census hires.
Average hourly earnings increased 9 cents in February to $28.52. Wages were up 3.0% from a year earlier, remaining within the narrow range of the last year and a half, but still a solid pace considering inflation is low.
Kate Bischoff, a Minnesota employment lawyer, said some of her clients in technology and professional services are rethinking the wage increases they had budgeted for 2020, wondering if they can afford to dole out raises if coronavirus wreaks havoc on the economy.
“Should we be preparing for a recession?” she said they are asking. “Should we be raising salaries at this point in time?”