–Unemploy Rate Steadies as Participation Rises; Hrs-Wages Gain

By Joseph Plocek

WASHINGTON (MNI) – The U.S. February employment report was pretty
much as expected — suggestive of a better labor market but not a
too-fast pace of growth.

February payrolls printed +227,000 and revisions to
December-January were +61,000 on net. Upward revisions to prior months’
payrolls are often associated with a growing economy.

The civilian unemployment rate was steady at 8.3%, as the labor
force participation rate advanced 0.2 point to 63.9%.

Unemployment had been falling in earnest since November 2010’s
near-10%, and it is not unusual for participation to pick up as the
economy improves and those out-of-work return to actively seeking
employment. That is probably why the declining unemployment rate stalled
in February.

What remains unusual is that participation remains lower than
normal — normal would be in the higher-60s. The advance in
participation in February appears to be in adult and late teenage women.

The as-expected data are consistent with +2% to +3% real GDP
growth, not a surge. But clearly this report is to be cheered as
indicating further improvement in the labor market. Private payrolls
are averaging a very decent +259,000 a month in Q1 so far.

Payroll composition in February included: manufacturing +31,000
(all in durables), construction -13,000 (mainly in specialty trades),
retail -7,400 after January surged +26,100, finance +6,000, temporary
jobs +45,200, health care +49,000, and government -6,000 as federal jobs
fell. The broad gains and the dip in construction jobs suggest there was
minimal impact from good weather.

Hours rose, and private Average Hourly Earnings were up +3 cents to
+1.6% over the year. So it is highly likely production and incomes
gained in February.

Details: Payrolls/Prior Pv AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd
Feb +227k —- +1.60% 103.3 8.3% (8.2688%)
Jan +284k +243k +1.50% 102.7r 8.3% (8.2632%)
Dec +223k +203k —- 102.4 8.5%

** Market News International Washington Bureau: (202) 371-2121 **

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