The number of jobs in February 2020 increased despite the outbreak of coronavirus
The labor market showed steady growth in February: employers added 273 jobs, despite a slowdown in the economy, job shortages, and concerns about coronavirus. Writes about it USA Today.
The unemployment rate fell from 3,6% to 3,5%, which corresponds to a 50-year low.
Employment growth for December and January was revised up by a total of 85. December's figure rose from 000 to 147, and January's from 000 to 184.
Many economists say that concerns about coronavirus are unlikely to significantly affect job totals in February, as the outbreak did not begin to have a stronger impact on the economy and the stock market until late February. However, due to factors associated with coronavirus, wages may drop sharply in the coming months.
Before concerns about the epidemic arose, confidence in business was still maintained by easing trade tensions in the US with China after signing the first stage of the agreement.
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The reason for the increase in employment was also an unusually light snowfall and historically low unemployment rate, which led to a shortage of workers and probably prompted some firms to shift the spring hiring season to the end of winter.
The hiring process for the 2020 census may have helped a bit: 8000 jobs were added.
But many economists expect the labor market to soften in the coming months as the economic impact of the outbreak of coronavirus increases. Over the past two weeks, the Dow Jones Industrial Average has experienced strong fluctuations, falling by almost 5 points on Thursday, March 1000, amid concerns about the final impact of the epidemic on the economy. To mitigate the blow, the Federal Reserve reduced the rate by half a percent.
“Equity market sell-offs, weakening global demand, strained supply chains and heightened economic uncertainty will weigh on business sentiment and their ability to weather the storm,” Morgan Stanley said.
Even before the virus became increasingly worrisome, economists had expected average monthly job growth to decline from 175 in 000 to just over 2019 by the end of 100 due to slower economic growth and the struggle of employers to find workers.
Wages are rising
Average hourly wages increased by 9 cents to $ 28,52, reducing annual growth from 3,1% to 3%.
After increasing to 3,5% at the end of 2018, wage increases fluctuated around 3%, despite falling unemployment.
Moderate profits held back incomes, but also helped curb inflation, allowing the Federal Reserve to repeatedly cut interest rates since the summer of 2019.
Industries that hire employees
The education and health sectors created 56 new jobs. Leisure and hotel business - 000; professional and business services - 51; financial activities - 000.
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42 jobs were added in construction, which is the second largest measure of productivity. Production increased by 000, despite early supply chain disruptions caused by the outbreak of the coronavirus and a halt to production of the Boeing 11 Max airliner after two catastrophic accidents. Some manufacturers may fire workers because an outbreak continues to impede the supply of parts from abroad.
The proportion of Americans working or looking for work, held at 63,4% for the second month in a row (the highest level since June 2013). This reflects the favorable labor market changes that are attracting Americans.
What does it mean
Since the end of February, the worldwide spread of coronavirus has had a negative impact on markets and increased the chances of a recession. Factory parts and retailers remain in China. And although the outbreak in the United States was limited, there is a risk of its more rapid spread.
Oxford Economics economist Lidia Bussur said the Fed expects a rate cut by a quarter percentage point in March and April.
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