Decent February job growth. But the boom times may be ending

Been out of town so can't write too much, but I wanted to give a quick rundown on the February US jobs report that came out last Friday.

If you look at the topline, the nunbers are an odd mix of job growth and higher unemployment.

JUST IN: Another strong jobs report. The US economy added 275,000 jobs in February as the hiring boom continues. (Hiring was 229k in January and 290k in December.)

Unemployment rate: 3.9% —> It’s been below 4% for two years

Wages: 4.3% in past year (above 3.1% inflation) pic.twitter.com/5xTWfBgBMo

— Heather Long (@byHeatherLong) March 8, 2024

The unemployment rate rose to 3.9% in February.
That's still low, but we need to watch this.

+334,000 more people were unemployed in February. The labor force (job seekers) increased by just +150,000.

Keep an eye on the unemployed number this spring pic.twitter.com/m3iibP5463

— Heather Long (@byHeatherLong) March 8, 2024

But note the reference to 229,000 jobs in January and 290,000 in December. That's quite a bit less than the 353,000 in January and 333,000 in December that were reported in the previous jobs report. Which makes me wonder how this report would have been received if it was 108,000 jobs added and no revisions (which is the net change). Ironically, Wall Street probably woud have liked it more, since those numbers might have encouraged the Federal Reserve to cut rates sooner rather than later.

On the flip side, the average increase of 265,000 jobs a month since December is the fastest 3-month growth period since last Summer. And while average hourly wages only rose by 0.14% in February, the average weekly wage rose by 0.44%, due to a longer average work week. That's the reverse of January's report, which had hourly wages up by 0.52%, but weekly wages were down by a little less than 0.1%.

I also noticed that the strong growth in construction jobs continued in February, with 23,000 more jobs that month and 215,000 over the last year. It also contrasted with a loss of 4,000 jobs in the manufacturing sector, continuing a trend where hiring in manufacturing has mostly flatlined over the last 18 months even as construction keeps rolling along.

The leading sector in US job growth continues to be health care, with more than 66,000 jobs added in February, and more than 720,000 over the last year. After losing sizable amounts of employees during the COVID pandemic, health care employment finally got back into its pre-COVID levels in late-2022. And since then, it's been a strong and steady rise up, as nearly a million more people are working in the health care sector than they did before the pandemic.

To me, things are still in a decent place in the US job market in early 2024. Hiring continues, even if the pace is a bit slower than the boom times of 2021-early 2023. And while we should keep an eye as to whether unemployment keeps nudging higher, a 3.9% rate is still nowhere near a danger zone of recession. Wage growth is staying decent, and generally ahead of the rate of inflation (February was an exception for hourly wages...although not for weekly wages).

Can't complain too much, but it also feels like things won't be as easy as they were. Suppose that's to be expected when things have been so good for so long, but that doesn't mean people haven't started to get used to it, and it'll be interesting to hear the spin if/when job growth falls to the 178,000-a-month pace that we had in the first 3 years under Donald Trump.