State of the Labor Market

February Jobs Report: Almost Nobody Left Behind

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The payroll gain was the largest in over a year, as the booming labor market brought more people back to work.

February’s job report was remarkably strong. The payroll gain was the largest in over a year, even when excluding the weather-sensitive sectors that often make winter data volatile. Blue-collar sectors drove these gains, led by mining and construction. Manufacturing is now outpacing the economy overall, and even retail had a strong February.

The booming labor market brought more people back to work. The most important household measure — the prime-age employment-population ratio — jumped to 79.3%, its highest level in almost a decade. Although wage growth slowed in February and was revised downward in January, wages are up 3.2% in the past quarter at an annualized rate. Best of all, the long-term unemployment rate is down to 2008 levels. The benefits of recent job growth are widely shared.

Still, growth is getting closer to its limits. With low population growth, recent payroll gains can’t be sustained longer-term, and concerns about tariffs have injected more short-term uncertainty into the jobs picture, especially for the rebounding manufacturing sector.

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