Employers added 235,000 workers to their payrolls in February, the government reported on Friday, a hefty gain that clears the path for the Federal Reserve to raise its benchmark interest rate when it meets next week.þþThe official jobless rate fell to 4.7 percent, from 4.8 percent in January, while average hourly earnings grew by 0.2 percent in a report that overlaps with President Trump’s first full month in office.þþ“They’re ready to go,” said Diane Swonk, founder and chief executive of DS Economics, referring to the central bank’s expected vote next week to raise rates from their historically low levels.þþPresident Trump, who had dismissed the official jobs reports as phony when he was a candidate, retweeted a tweet from the conservative website Drudge Report that said “GREAT AGAIN: +235,000.”þþþThe overall economic momentum and optimism was given an extra push by February’s unusually warm weather, with almost a quarter of the jobs — about 58,000 — coming from construction alone. Manufacturing also bounced back.þþOver the past three months, including revisions announced Friday, monthly job growth has averaged 209,000, while year-over-year wage growth jumped up to 2.8 percent.þþAlthough the economic anxiety that helped put President Trump into the White House remains, the official jobless rate is near what the central bank considers full employment — a threshold where, in theory at least, everyone who wants a job at the going rate can find one.þþAt the same time, jobless claims are near a 44-year low, the stock market is surging, and consumer spending is growing, bolstering the case for those who argue the economy is strong enough to withstand a rate increase.þþParticularly significant in February was the bump up in the labor participation rate to 63 percent – a result of rising employment even among people without a high school diploma. “There’s got to be some optimism that these people are feeling they finally have a chance,” Ms. Swonk said.þþOn the other end are employers who are seeing acute labor shortages. “They offering training programs now,” she said. “They’re complaining about it that’s what tight labor markets do. It forces you to invest more to work with less.”þþRecruiters and employers complain that qualified workers are scarce, pushing them to raise wages, strengthen benefits and offer cushier amenities at the office. “There is a war for talent,” said Lauren Griffin, senior vice president at Adecco Staffing USA. “We’ve got people in orientation classes and they get up and leave because they’re contacted about another job that might be more money.”þþEven lower-skill workers in some sectors are finding themselves in more demand. The year-over-year wage gains for store managers and cashiers, for example, were twice the national average, said Andrew Chamberlain, chief economist at Glassdoor, a career website.þþBigger paychecks are something that most Americans, after years of stagnant wage growth, are particularly eager to see. The Federal Reserve, too, has been waiting for an increase, but it is also wary of wages rising too fast. The board’s members want to head off incipient inflation and so have begun to slowly raise rates, which makes borrowing and risk-taking more expensive. At the same time, the Fed wants to avoid putting the brakes on job hiring, especially because the benefits of the eight-year-old recovery have been so unevenly distributed.þþBalancing those two goals is tricky.þþA broader measure of unemployment — which includes the millions of Americans who have given up looking for work altogether or are working part time but would prefer full-time jobs — dropped to 9.2 percent but is still high given how tight the labor market otherwise looks.þþCautioning the Fed against moving too quickly with a rate hike, Josh Bivens, director of research at the left-leaning Economic Policy Institute, noted: “The share of adults between the ages of 25 and 54 with a job hasn’t even recovered to pre-Great Recession levels, which were, in turn, far below the peaks reached in the late 1990s. And most importantly, no durable and significant acceleration of wage growth to healthy levels has happened yet.”þþWhere you live and what you do for work can determine how bright your economic prospects are.þþThose who reside in or near larger cities are receiving the highest gains, despite high housing costs. Large metropolitan counties have seen more than twice the annual wage growth of nonmetropolitan areas, according to the latest figures from the Bureau of Labor Statistics.þþ“Higher-wage jobs might be following educated, young workers, who are increasingly living in dense, urban neighborhoods as other demographic groups move to the suburbs,” said Jed Kolko, chief economist at the job-search site Indeed. “Broader economic shifts also favor big cities: The occupations projected to grow tend to be more urban, while shrinking sectors like manufacturing and farming tend to be located outside large metros.”þþThat is disappointing for people with longstanding ties to smaller, more rural communities. “A lot of this has to do with mobility,” said Steven W. Rick, chief economist at CUNA Mutual Group, an insurance company. “People are going to have to move where the jobs are and not expect the jobs to come where they are.”þþIf some are in the wrong place, others lack the right skills for an economy heavily geared toward information and services. “There is a certainly still a talent shortage out there,” said Michael Stull, senior vice president at Manpower North America, a staffing agency. The firm’s annual survey of 2,200 hiring managers showed that 46 percent reported they had difficulty filling job vacancies in 2016, up from 32 percent in 2015.þþThere are potential headwinds. Dissension among Republicans and unpredictability about President Trump’s course in several policy areas could constrain the hiring outlook. “Uncertainty means you don’t pull the trigger right now,” Ms. Swonk said.þþThe future of the Affordable Care Act and a possible replacement is making hospitals and community health centers cautious about adding to their staffs. And a strong dollar and a potential backlash against the White House’s travel ban could slow tourism, and thus hiring in the sector. Mr. Trump’s across-the-board hiring freeze on federal government jobs, combined with declines at the state level, will keep down the number of public sector employees.þþThe uncertainty extends to prospects for tax cuts. Some Wall Street analysts, expecting delays, have pared down their growth forecasts for 2017, after recently raising them.þþFor the moment, though, optimism about the job market remains strong.þþ“The economy is riding a wave of bullish sentiment postelection,” Mr. Chamberlain of Glassdoor said. “We’re seeing strong labor demand across the board and no sign of slowing right now.”
Source: NY Times
