U.S. February Jobs Growth Tops Forecasts; Unemployment Rate Rises to
4.4%.
Washington, March 5 (Bloomberg) -- The U.S.
unemployment
rate unexpectedly crept higher in February to 4.4
percent from 4.3 percent in January even as companies
added jobs at a robust clip. Worker's wages barely
budged.
Last month's increase of 275,000 jobs was above
analysts' forecasts of a gain of 244,000, Labor
Department figures showed. During January, employment
gains totaled a revised 217,000, lower than the
government's initial estimate of a gain of 245,000.
Analysts expected a jobless rate of 4.3 percent for
last month. ''The only news in this number is the
economy has a lot of forward momentum,'' said Suzanne
Rizzo, an economist at Maria Fiorini Ramirez in New
York. The jobs increase ''looks like a very strong
number,'' she said. ''The unemployment rate change
isn't statistically significant.''
Workers' average hourly earnings, a gauge of business
costs, rose 0.1 percent -- or 1 cent -- to $13.04 in
February, following an increase of 0.4 percent during
January, previously reported as an gain of 0.5
percent. Analysts had expected earnings to rise 0.3
percent last month.
Bonds surged after the earnings figures showed ''we
can grow without inflation -- growth without wage and
price pressures,'' said Kenneth Mayland, chief
economist at KeyCorp in Cleveland. That will probably
keep Federal Reserve policy-makers from raising
interest rates, Mayland said.
The U.S. Treasury's benchmark 30-year bond rose 2
points, pushing down its yield 15 basis points to 5.55
percent after today's report. Stocks were expected to
open higher.
Retail, Construction Surge
Service-producing employment rose by 263,000 in
February,
led by the biggest gain in retail hiring in 11 years.
Retail jobs rose 123,000, after rising 36,000 in
January. February's increase in retail hiring was the
largest since a 128,000 gain in February 1988.
Manufacturing employment decreased by 50,000 last
month, bringing the total job cuts in factory
employment to 337,000 since last March.
Construction employment rose by 72,000 because of
unseasonably warm weather during the month, the Labor
Department said. Temperatures ranged from 5 degrees to
15 degrees above normal across the eastern two-thirds
of the country during Feb. 7- 13, resulting in more
than 225 daily-record highs, according to a National
Weather Summary provided by the Department of
Agriculture. That's the same week the Labor Department
conducted its monthly employment survey.
Record high temperatures for the week -- upwards of 80
degrees in some parts -- stretched from Salt Lake
City, Utah to Detroit, Michigan to Newark, New Jersey,
according to the summary. Along the Pacific Coast,
though, temperatures fell and precipitation was heavy.
A Million New Jobs
Since November, the economy has added more than a
million jobs. The overall labor force fell by 76,000
to 139.27 million in February. It was the first drop
since last July, during the General Motors Corp.
strike. The number of discouraged workers -- those who
aren't employed and aren't looking for a job either,
was 271,000, down from 361,000 in February 1998.
The rise in February payrolls was telegraphed by other
reports showing a steady drop in claims for state
unemployment benefits, a jump in help-wanted
advertising and rising consumer confidence.
The four-week moving average of new jobless benefit
claims has fallen for six straight weeks, and reached
a 10-year low of 290,750 last week, the Labor
Department reported yesterday.
Help-Wanted Ads Rise
Also last week, the New York-based Conference Board
said its index of help-wanted ads in 51 newspapers
across the country climbed to 93 in January from
December's 88. The index was at 90 a year ago.
Help-wanted advertising rose in seven of the nation's
nine major regions surveyed during the past three
months.
And the Conference Board's consumer confidence survey
last week showed its component gauging if jobs are
''hard to get'' dropped in February to a record low
and its index on whether jobs are ''plentiful'' rose
to a record high.
Those signposts of vigorous job growth also match
evidence that manufacturing -- the only weak spot in
the U.S. economy over the past year -- may be
rebounding, while housing and retail sales are
booming.
Orders placed with U.S. manufacturers rose 1.7 percent
during January, the seventh gain in the last eight
months, the Commerce Department reported yesterday.
U.S. stores open at least a year reported their sales
rose 7.6 percent during February, according to the
Bank of Tokyo/ Mitsubishi index, which tracks about 85
retailers. That was above an expected 5.5 percent gain
and came on top of an 8.3 percent gain in January.
And while sales of new single-family homes declined 5
percent in January to an annual rate of 918,000 units
after falling to a 966,000-unit pace in December, the
monthly total was the third best of all time. New
houses sold at a record annual rate of 1 million in
November.
Other Report Details
The Labor Department also said:
-- Average weekly hours worked rose to 34.7 in
February from 34.5 during January. -- Manufacturing
overtime decreased to 4.5 hours during February from
4.6 hours during January. -- The index of hours
worked, a gauge of economic growth that combines
changes in the work week and changes in payroll
growth, rose to 147.3 in February from 146.4 during
January. -- Average weekly earnings increased to
$452.49 during February $449.54 during January. -- The
percentage of unemployed workers who voluntarily quit
their jobs in February rose to 12.3 percent from 11.8
percent during January. -- The percentage of the U.S.
population holding jobs decreased to 67.3 percent in
February from 67.4 percent during January.
Employment Outlook
In its latest economic forecast, the Federal Reserve
predicted the U.S. unemployment rate will stay close
to its current level throughout over next two years,
ranging between 4.25 percent and 4.5 percent. Last
year, the unemployment rate averaged 4.5 percent, the
lowest since 1969, during the Vietnam War.
What's more, a recent survey suggested U.S. companies
will step up their hiring during the second quarter of
1999.
According to Manpower Inc.'s quarterly survey of
16,000 businesses, 29 percent expect to take on more
employees during the second quarter of the year, 6
percent said they'd cut their workforces, and 61
percent said their employment levels would remain the
same.
That's up from hiring expectations for the current
quarter, which end March 31, according to the Manpower
survey. ''We see no deterioration of hiring
strength,'' said Mitchell Fromstein, chief executive
officer of Milwaukee-based personnel company.
Though hiring plans were slowest at U.S.
manufacturers, the ''weakness is centered more on new
hires than on downsizing activity,'' Fromstein said. |
