Unemployment

U.S. job gains exceed predictions, but unemployment rate rises

March 7, 2014

Employers added more workers than projected in February, an indication the U.S. economy might be starting to bounce back from a weather-induced slowdown. The jobless rate, however, unexpectedly climbed from a five-year low.

The 175,000 gain in employment followed a revised 129,000 increase the prior month that was bigger than initially estimated, Labor Department figures showed Friday. The median forecast of economists in a Bloomberg survey called for a 149,000 increase in February. Unemployment rose to 6.7 percent from 6.6 percent as more people entered the labor force and couldn’t find work.

The report indicates employers remain upbeat about the economy’s prospects after winter storms and freezing temperatures across the eastern U.S. slowed consumer spending, housing and manufacturing. Lowe’s Cos. is among those boosting headcount, setting the stage for further gains as Americans return to stores.

“It’s a pretty good report, given the weather,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly predicted the gain in payrolls. “You had a pretty good rise in average hourly earnings, you had some good gains in jobs in a couple of different sectors.”

The figures showed hiring at professional and business services increased by the most in a year, while payrolls also rebounded in education and health services. State and local government agencies, factories and construction firms also added to headcounts last month.

Revisions to prior reports added a total of 25,000 jobs to overall payrolls in the previous two months.

Bloomberg survey estimates of 92 economists for February payrolls ranged from gains of 100,000 to 220,000. Last year, the U.S. added 194,000 jobs each month, on average.

The unemployment rate was forecast to hold at 6.6 percent in February. The Labor Department’s survey of households showed an increase in people entering the labor force, while few of them were able to find work. The so-called participation rate held at 63 percent.

Federal Reserve officials have de-emphasized the jobless rate as a point at which it would consider raising borrowing costs. Labor-market improvement is one reason why policy makers have dialed back monthly bond buying by $10 billion at each of its past two meetings.

While Fed Chair Janet Yellen reiterated the 6.5 percent threshold in testimony before the Senate Banking Committee Feb. 27, the Federal Open Market Committee debated “the reliability of the unemployment rate as an indicator of overall labor-market conditions,” minutes of Fed officials’ last meeting showed.

Friday’s figures showed 601,000 Americans weren’t at work because of weather during the survey week, the most since 2010, the agency said. Bad weather can affect the payroll count if employees didn’t receive compensation for the entire pay period that included the 12th of month.

Hours worked declined as well because of the inclement conditions. The average workweek for all employees dropped to 34.2 hours in February, the lowest since January 2011, from 34.3 hours. For production and non-supervisory employees, hours worked fell to 33.3 from 33.5.

Almost 6.9 million people worked less than a full week, the most since record-keeping began in 1978, the agency said.

The week ended Feb. 15 was the coldest second week of February since 2011, according to weather-data provider Planalytics Inc. The South Atlantic region of the U.S. experienced the most snowfall since 1983 and New England registered the most in 20 years during the period, the Berwyn, Penn.-based firm said. February’s winter blitz followed the chilliest January in three years.

Private employment, which excludes government agencies, rose by 162,000 in February after 145,000 the prior month. Factory payrolls increased by 6,000 for a second month and construction companies took on 15,000 workers.

Employment at private service-providers rose 140,000. Jobs in education and health services rose 33,000 in February, the most since August. Temporary-help service employment rose 24,400.

As winter weather gives way to warmer temperatures, home- improvement retailers Lowe’s and Home Depot Inc. are planning on hiring. Mooresville, N.C.-based Lowe’s announced Feb. 19 that it will be adding about 25,000 seasonal employees this year for the industry’s busiest season. Home Depot will add 80,000 positions for the spring and summer, matching 2013.

ADVERTISEMENT

Recent Articles by Bloomberg News

Comments powered by Disqus