On Friday, U.S. government reported that employers added 242,000 workers in February. The results is sharply better than expectation of 195,000 workers. Unemployment stay at 4.9% while more Americans joined the labor force, pushing the participation rate to its highest level in a year.
“We’ve got a real strong job market going,” said Carl Tannenbaum, chief economist at Northern Trust. “It does suggest that fears about a U.S. recession have been greatly overdone.”
However, Americans’ wages decreased 0.1% from the prior month, putting the annual gain at only 2.2%. Average hour earnings of private firm workers decreased $0.03 to $25.35 on February. The weak wage performance should leave the Federal Reserve on hold at its meeting this month, though improvement in other gauges will likely raise the prospect of further rate increases this year.
“This should scotch suggestions that the U.S. is about to tip into recession,” said Luke Bartholomew, investment manager at Aberdeen Asset Management. “It’s yet more evidence that the labor market is in good shape although wage growth was more disappointing.”
Four years ago, at this point in the last presidential election cycle, the unemployment rate was at 8.3% and the economic recovery was in a relatively early stage. Then, worries centered on rising gas prices, deep consumer debt and government layoffs.
Now, the recovery is in its seventh year, the unemployment rate has dropped sharply to 4.9% and the private sector has chalked up 72 months of uninterrupted job gains, the longest streak on record.
Moreover, a broad measure of unemployment that includes Americans stuck in part-time jobs or too discouraged to look for job decreased to 9.7% from 9.9% in January which is the lowest level since May 2008.