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February job growth numbers far exceed projections, unemployment drops to 50-year low

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The impact of coronavirus hasn't hit the labor market

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Job growth in February far exceeded expectations, and the unemployment rate dropped to 3.5%, which is tied for the lowest level in 50 years, CNBC reported.

Job growth

The U.S. economy added 273,000 jobs in February, surpassing a prediction of 175,000 new jobs based on a Dow Jones survey of economists.

Additionally, the growth numbers for the previous two months were revised upward. December's job growth was changed from 147,000 to 184,000, and January's growth was actually 273,000, not 225,000.

The health care industry added the most jobs in February, 57,000, while food services and drinking places added 53,000 jobs. Census hiring boosted government employment numbers by 45,000. The construction industry added 42,000, professional and technical services added 32,000, and finance rose 26,000.

Overall, the total employment level is 158.8 million, which is close to the record that was set in December 2019.

Unemployment rate

The unemployment rate dropped from 3.6% in January to 3.5% in February. It was expected to remain at 3.6%. It's a 50-year low that was tied in December.

The labor force participation rate is 63.4%, nearly the highest level since mid-2013.

When considering jobless people who aren't looking for work and people working part-time jobs for economic reasons, the unemployment rate is 7%.

Coronavirus

The strong jobs numbers reflect the state of the labor market before the spread of coronavirus in the U.S. became a widespread issue, and economists are unsure what things may look like going forward. From CNBC:

Most of the consumer-related data points have been good, though the reports coming in now largely cover the early stages of the coronavirus scare and the sharp recent stock market volatility.

With the large measure of uncertainty around the disease, its impacts may be felt in increments rather than suddenly. But if cracks begin to form, the first notices likely will come in employment data.

"If we start to handle things the way they're handled in Italy and South Korea, closing schools and having mandated cancellations of travel and sporting events, I think there's no way we don't start to see it in the labor market and in consumer confidence and spending," [Liz Ann ] Sonders [chief investment strategist at Charles Schwab] said.
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