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Bruce Steinberg


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Quick recap

 

Overall job growth was 235,000 in February and that was 3,000 lower than January; one year prior in February 2016, growth was essentially the same at 237,000. In addition, Temporary help services grew for the second consecutive month but even when the gains observed in January and February are combined, they still failed to compensate for December's decline.

On the other side of the monthly employment situation, the unemployment rate was 4.7 percent and that was incrementally lower than January's 4.8 percent as well as February 2016's 4.9 percent. See the Household Survey section below.

 

Jobs Report

 

The number of private-sector jobs grew by 227,000 in February compared to 221,000 in January. A year ago, in February 2016, the economy added 221,000 private-sector jobs. Obviously, not much variation in this measurement.

 

The private Goods-producing sector was up 95,000 in February after an increase of 54,000 in January; a year ago, in February 2016, it declined by 7,000.

  • Manufacturing growth, which had increased 11,000 in January, picked up and gained 28,000 jobs in February; a year ago, in February 2016, manufacturing was down 12,000 jobs.

  • The Construction sector was up a massive 58,000 in February after somewhat equally impressive growth of 40,000 in January; a year ago, in February 2016, it added 23,000.

  • Mining and logging, which had declined 18,000 one year ago in February 2016, was up 9,000 in February after adding 3,000 in January and increasing 2,000 in December 2016. 

The private Service-providing sector gained 132,000 jobs in February, which was a disappointment from January's gain of 167,000; a year ago, in February 2016, it was up 228,000.

  • The Retail trade sector processed 26,000 job returns (declined) in February after gaining 39,900 in January; a year ago, in February 2016, it was up 48,400.

  • Growth continued, and picked up a little, in the Wholesale trade sector that increased 9,900 in February that was better than the 5,900 it added in January; a year ago, in February 2016, it was down 1,500.

  • The Transportation and warehousing sector reversed direction with a gain of 8,800 in February after losing 10,200 jobs in January; a year ago, in February 2016, it was up 3,200.

  • Job growth in the Financial activities sector slowed with the addition of 7,000 in February after bulking up (increasing) by 32,000 in January; a year ago, in February 2016, it was up 6,000 jobs.

  • The Professional and business services sector was up only 37,000 in February compared to growth of 46,000 in January; a year ago, in February 2016, it was up 25,000. Job growth in Computer systems design and related services was 5,500 in February after adding 11,300 in January. Management and technical consulting services, was up 6,300 in February after essentially unchanged in January (a decline of only 100). And Architectural and engineering services was up 4,500 in February after adding 6,000 in January.

  • The Education and health services sector added 62,000 jobs in February with its highly seasonal Educational services sub-sector up 29,300 jobs. Home health care services was up 4,200 jobs in February, which was healthier than the 1,600 job-growth it experienced in January.

  • Hiring in the Leisure and hospitality sector continued to grow with a gain of 26,000 in February and that only slightly better than the gain of 24,000 seen in January; a year ago, in February 2016, it was up 45,000.

The total number of Government jobs was up 8,000 in February. In February, the federal government was up 2,000 jobs, State government was down 3,000, and Local government up 9,000.

Temporary Help Services Roundup

 

In February, there were 2,971,200 temporary help services jobs, which was a gain of 3,100 jobs. This was sequential growth of only 0.1 percent but year-over-year growth of 3.2 percent. A year ago, in February 2016, this sector was down by 6,700 jobs. Moreover, January's initially reported growth 14,800 jobs last month was revised to growth of only 6,500 with the latest data release. For a chart of temporary help's growth from January 1991 to February 2017 and comparing its trend to total employment, click here.

 

Temporary help's market share in February -- that is its portion of all jobs -- essentially held steady at 2.04 percent, or 2.0379 percent, compared to January's figure of also 2.04 percent but at  2.0390 percent. A year ago, in February 2016, it was 2.01 percent or 2.0078 percent.

 

(if the chart is unclear, click on them to open in a browser window)

Household Survey

 

Here are some specifics regarding February's unemployment rate of 4.7 percent that was 0.1 percentage point lower than in January.

 

The size of the civilian labor force expanded by 340,000 in February from January, there were 447,000 more employed persons, and 107,000 fewer unemployed persons, which is why the unemployed rate was lower. In other words, the growth in the number of employed persons was greater than the growth in the labor force, so the number of unemployed persons declined and the unemployment rate fell, albeit incrementally.

 

The employment-to-population ratio increased 0.1 to 60.0 and the labor force participation rate also rose 0.1 and was 63.0 in February. There were 176,000 fewer people in the labor force in February from January.

 

BTW, we maintain an updated table of many major employment as well as other economic indicators here or here for the mobile version.

 

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So how big is the labor force?

 

For the past two months in this space we addressed labor force trends by focusing in on the trends by different ago groups or cohorts. One astute reader pointed out that we were remiss by not discussing a very basic point -- the actual definition of the labor force. (We would like to point out that this was before the President, in his State of the Union Address last week, brought up the issue of labor force size.)
 

The answer is pretty straightforward, sort of. The labor force is all individuals 16 years of age and older who are either employed or unemployed. That's where the straightforward part pretty much ends.

 

To be considered as employed, the answer is fairly simple -- the person did at least one hour of work as a paid employee or "worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family." There are further explanations that even if a person had a job, but did not actually work during the survey week because of being on vacation, bad weather, etc. regardless if the person was paid or unpaid, that counts as being employed.

 

The situation gets a bit more complicated defining unemployed. It boils down to the person had to be looking for work during the immediately four weeks prior to the survey week to be considered as unemployed. Basically, the person has to be actively looking for work. If not, they are no longer considered as part of the labor force. But there are exceptions; for example, if the person is waiting to be recalled from a layoff and did not look for other work for that period, they are still considered as unemployed.


But, the reality of the situation can be a bit different. Often when people cannot find suitable employment, they stop looking for work. So if they stopped looking more than four weeks but still consider themselves as unemployed, officially, they are not unemployed and no longer in the labor force. This is why other metrics such as the labor force participation rate and employment-to-population ratio are important to keep an eye on.

 

The question remains -- and will unless the wording of the monthly survey changes -- how many of those sitting on the sidelines and officially considered as 'not in the labor force' will eventually return to the labor force? It's not an easy answer to come up with but apparently, buried deep in BLS measurements are those not considered in the labor force but want a job. So, out of the 94.4m not in the labor force, about 5.7m say they want a job.

 

 

 


 


NEXT EMPLOYMENT REPORT -- FRIDAY, APRIL 7, 2017

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