ARLINGTON, Va.–The February jobs report – with 273,000 jobs added – showed the labor market was "still in good shape in mid-February," with the construction sector and restaurants supporting gains, said NAFCU Chief Economist and Vice President of Research Curt Long.
In addition, the December and January gains were revised up 37,000 and 48,000 jobs, respectively.
"The February jobs report was a strong one, with sturdy job gains and positive revisions to the past two months' reports," said Long. "Notably, long-term unemployment matched its lowest level since the crisis as the strong hiring environment continues to reach the most vulnerable job seekers."
Average hourly earnings increased nine cents during the month to $28.52; however, year-over-year wage growth dropped to 3%. The unemployment rate remained at 3.5%, with the labor force participate rate holding steady at 63.4%, according to the Bureau of Labor Statistics.
Also of note, total private-sector payroll employment increased 228,000 jobs, with the good-producing sector increasing 61,000 jobs and the service sector adding 167,000 jobs. Public sector employment grew 45,000 jobs in February, Long said.
In light of the ongoing spread of the coronavirus, Long acknowledged most companies reported their numbers before the virus spread in the U.S.
Another Rate Cut?
Last week, the Federal Reserve cut interest rates by 50 basis points in efforts to mitigate the potential economic effects of the coronavirus, setting the federal funds target rate to a range of 1 to 1.25%. In the new report, Long noted "Fed officials have offered conflicting views about whether further stimulus will be forthcoming."
"Given the sharp drop in interest rates resulting in a steeply-inverted Treasury yield curve, there will be mounting pressure on the Fed to respond by lowering short-term rates again," Long concluded. "Credit unions should prepare for more rate cuts to follow, starting with the March FOMC meeting."