US lament over decline in job creation
US job creation ground to a virtual halt last month, the government reported Friday, a blow to President Donald Trump’s hopes for undiminished economic growth this year.
But after the unusually dramatic swing in the critical monthly data, economists — whose forecasts missed badly — hastened to say that underlying employment trends remained strong, and highlighted the hefty boost in worker pay. The figures also will be revised.
Job creation was the slowest since September 2017, which adds to widespread reports from firms nationwide complaining that worker shortages are beginning to impede growth in their businesses.
Despite the drop, the unemployment rate fell and hourly wages saw their biggest gains in nearly a decade, more evidence of the tight labor market.
The sudden collapse in hiring — including deep job cuts in the construction retail and transportation sectors — is sure to revive worries about the dwindling supply of American workers.
US employers added just 20,000 net new positions for the month, only a fraction of what economists had been expecting, while unemployment fell two tenths to 3.8 percent, its lowest level since October, according to the closely-watched Labor Department report.
Economists had been projecting a far stronger 173,000 gain. Over the last three months, job creation has averaged a slightly higher 186,000.
Trump downplayed the decline, but February still marked a dizzying tumble from January’s blow-out 311,000 net new positions — a number the White House had held out as a sign that robust economic growth would continue.
“I think you will find probably find out it averages out,” Trump told reporters on Friday. “The unemployment rate just went lower…. I think the big news really was that wages went up and that’s great for the American worker.”
The decline in the unemployment rate may seem contradictory to the weak job creation, but the figure is derived from a different survey and reflects a shrinking labor force.
The data can produce the occasional blip due to weather or other one-off factors and these numbers are subject to revision. Economists said the weakness may have been exaggerated after a big gain in the prior month or due to seasonal adjustment, meant to smooth out sharp swings due to weather or other expected elements.
– Unwelcome news –
The hiring slowdown may weigh on first-quarter GDP calculations, threatening to take the shine off the economy’s in the first quarter.
The US unemployment rate has been hovering 50-year lows since last year, with a hot economy’s hunger for new employees seeming to turn up new pockets of available labor every month.
