US non-farm payroll numbers down to 20,000 in February
US job growth stalled in February, according to the latest non-farm payroll statistics.
US non-farm payrolls fell to its lowest level since September 2017. Hiring was sluggish as jobs in February only increased by 20,000, according to US Bureau of Labour.
Non-farm payrolls: key figures
| Jobs added | 20,000 |
| Unemployment rate | 3.8% |
| Hourly earnings | +3.4% |
What do the non-farm payroll numbers mean for the US economy?
US non-farm payroll numbers sliding means that the roaring US economy could be settling down. The figures fell far short of the 180,000 jobs economists expected to be added. As IG analyst, Chris Beauchamp, noted, the slowing global economy and the US-China trade impasse led to uncertainty on Wall Street and a slowdown in hiring.
While the non-farm payroll numbers were discouraging, there was positive news from the jobs report. The unemployment rate was still low at 3.8%, lower than the expected 3.9%. Hourly wages also increased by 3.4%. Ryan Sweet, head of monetary policy research at Moody’s Analytics, said that the jobs numbers are concerning, but shouldn’t cause great alarm.
‘There’s no reason to panic. You average the couple months together and the jobs market is still doing well. Job growth will slow this year, as the economy begins to moderate. But 20,000 jobs is not what we’re going to be creating month-in and month-out,’ said Sweet.
Non-farm payroll: industry key figures
| Business Services | +42,000 jobs |
| Health Care | +21,000 jobs |
| Government jobs | -5,000 jobs |
| Construction | -31,000 jobs |
Which industries hired the most in the non-farm payroll report?
Business services saw the most growth, with 42,00 jobs added. The health care industry added 21,000 jobs. Those industries grew, but construction and government jobs declined. The construction field lost 31,000 jobs, while government employees decreased by 5,000. The drop was possibly because of the month-long government shutdown.
What will the non-farm payroll numbers mean to the Fed?
The US Federal Reserve chair, Jerome Powell, noted that he would exercise patience before deciding to raise interest rates. Charlie Ripley, senior investment strategist at Allianz Investment Management, noted that the jobs report may not affect the Fed raising interest rates in the near future.
‘I don’t think the slowdown in the pace of payrolls does anything to change the outlook. They’re pretty comfortable sitting back and waiting for the data to come through,’ said Ripley.
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