Commentary Magazine

The Jobs Report

The American economy created 295,000 jobs in February, well above the 230,000 predicted. The unemployment rate dropped from 5.7 percent to 5.5 percent. January’s jobs number was revised downward from 257,000 to 239,000. The participation rate dropped a bit to 62.8 percent, just one-tenth of a percent above where it was a year ago.

The long-term unemployed, out of work for six months or more, is at 2,709,000, 31.7 percent of the total unemployed. That’s down from 3,886,000 and 35.7 percent a year ago. So it’s trending in the right direction, but doing so slowly.

Wages remain sticky. Non-farm private payrolls went up only three cents, to $24.78. Over the last year wages are up only about two percent.

As the labor market slowly tightens, we should see wages increasing at a faster pace. But increases in the participation rate could negate that as more workers enter the labor market, confident they can now find a job. The Fed is unlikely to begin to tighten as long as wage growth is so slow.

The American economy has now created more than 200,000 new jobs a month for a year, and the slow-but-steady recovery remains on track.

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