February Job Growth Beats Expectations; Jobless Rate Ticks Up
DAVID GREENE, HOST:
It was pretty clear that the recent bout of winter weather that many of us have seen was going to have an effect on job growth in February. The question was how much. And it turns out less than expected. That's the message from the government's monthly employment report that's out today. It found that U.S. employers added 175,000 jobs to their payrolls last month. As NPR's John Ydstie reports, it's more than expected.
JOHN YDSTIE, BYLINE: Surveys showed economists had expected around 150,000 new jobs, and some, like John Sylvia, chief economist at Wells Fargo, had expected even fewer. So he was pleasantly surprised.
JOHN SILVIA: I think it is a very positive signal that while weather has had an impact on job gains in recent months, the underlying strength of the economy is starting to show itself.
YDSTIE: In addition to 175,000 net new jobs in February, employment growth in December and January was revised upward by a total of 25,000 jobs. However, despite the stronger job growth, the unemployment rate ticked up a notch to 6.7 percent. That's normally a bad sign, but not this time, says Silvia. That's because the data show more people coming back into the workforce or entering for the first time.
SILVIA: In either case, I take it as a good signal. More people looking for employment, so that that's actually the traditional signal for an improving economy.
YDSTIE: There was some evidence of the weather tamping down employment growth. Average hours worked actually ticked down slightly. But in another sign of improvement, average hourly earnings rose by a strong 4/10 of a percent. That's important because it improves the consumer's ability to spend and fuel additional growth and job creation. Silvia says he believes the economy is coming out of the snowy woods and will pick up in coming months.
SILVIA: I think there was a growing pessimism among some people that the economy was weakening pretty dramatically. And I think that's just not playing out. And I think also this is very reassuring to the Federal Reserve, that you know, their tapering policy has not had a big negative impact in the economy.
YDSTIE: Silvia says that means the Fed will continue to dial back its stimulus. And he says he's reassured that growth this year will be better than it was last year. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.