US economy adds just 20,000 jobs in February, unemployment at 3.8%
The U.S. economy added only 20,000 jobs in February, significantly less than what experts predicted, while unemployment fell to 3.8 percent, according to data released Friday by the Bureau of Labor Statistics.
Economists had expected an increase of 180,000 jobs. The low number -- a major drop from the 311,000 new jobs in January and the weakest growth since September 2017 -- is expected to reignite concerns over a potential economic slowdown in 2019.
U.S. Unemployment Rate (Bureau of Labor Statistics)
However, average hourly wages last month jumped a better-than-expected 3.4 percent year-over year, rate of increase not seen since April 2009.
The wage gains reflect a tightening labor market that is making it more difficult for employers to find skilled workers and forcing companies to pay more to attract talent.
While optimism among U.S. manufacturers remains high, for example, nearly 72 percent of respondents listed hiring as a tob concern.
“Manufacturing is really on the rise right now,” CEO Jay Timmons recently told FOX Business. “But the problem that we have right now [is] we can’t find enough people to do the jobs that we have open.”
Despite a hiring slowdown, several top industries added jobs last month. The health care sector, for example, gained 21,000 new jobs in February, while professional services added 42,000 new positions. Employment in the retail, transportation, financial services and other sectors remain unchanged. Jobs in construction, however, fell by 31,000.
Outside of workforce concerns, many U.S. companies also cite the ongoing trade dispute between the Trump administration and China as a worry for 2019. The White House has imposed tariffs on $250 billion in Chinese products.
While negotiations between Trump officials and President Xi Jinping's government remain ongoing, questions linger over how extensive any agreement would be and whether it would actually force China to make long-sought changes to its economy.
Trump also previoulsy levied double-digit duties on steel and aluminum imports. While the tariffs have benefitted some sectors, others like the automotive industry are dealing with increased raw material prices that are adding millions to yearly costs.
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Private sector hiring slowed last month, with non-farm payroll increasing 183,000 -- slightly less than expected.