By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC ***
Despite job growth stalling in February, experts are still optimistic about America’s economy.
February’s job growth slowed to just 20,000 payrolls added – significantly less than the 311,000 added the previous month. January’s job growth numbers were just a highlight of the bigger economic picture. The unemployment rate fell by 0.2 percentage point to 3.8 percent and average hourly wages grew at an annual pace of 3.4 percent.
Before the government shutdown, January’s surprising jump in new jobs made for a two-month trend of about 165,000 jobs a month.
February’s numbers do not show the U.S. as being on the brink of a recession. The market does however, have to recognize a slowing economy against the backdrop of a much weaker global economy. Some experts wonder how long the U.S. will have the ability to remain ahead.
Economists do question the quality of February’s data, which is most likely the result of the government shutdown and its impact on the workforce. Overall these numbers point to a sign of sluggish first quarter as opposed to a looming recession.
Government data has been inconsistent since the government shutdown and may have been affected by both the 35-day shutdown and a temporary work leave for government employees and private sector contractors.
Right now, many investors and economists are still waiting to get enough consistent data in order to assess what is really going on. January’s delayed retail sales report will be released this week along with any revisions to December’s numbers.
Stock futures dipped after the jobs report but were already lower after weak Chinese export data renewed trepidations of a global slowdown. However, the “real unemployment rate” (including discouraged workers as well as those holding jobs part time for economic reasons) dropped to an 18-year low of 7.3 percent from 8.1 percent last month.
In reality, the U.S. economy naturally slows in the first quarter due to typical weak winter activity, but anyone mentioning “recession” is wrong. For now, February’s numbers may be an outlier in the bigger economic landscape.
- 14 Mar, 2019
- Josh Smith