|
Unemployment rate falls
|
 |
March 6, 1998: 11:17 a.m. ET
Added construction, services jobs push February rate down to 4.6 percent
|
NEW YORK (CNNfn) - Continuing strength in the construction and services sectors solidified U.S. employment during February, according to figures released by the U.S. Labor Department Friday.
The number of non-farm payroll jobs -- the accepted employment measure -- rose by 310,000 last month, adding to the 375,000 jobs created in January.
The overall U.S. unemployment rate fell 0.1 percentage point to 4.6 percent in February from 4.7 percent in January. The downturn deviated from economists' predictions for the rate to remain unchanged.
The Labor Department said much of the increase could be pinned on gains in construction and services. Construction employment rose by 41,000 in February, continuing a trend that has added 230,000 construction jobs since October.
More construction workers were needed to repair recent El Nino rainstorm damage in the West and ice storm damage in the Northeast, Labor said. Construction also was boosted by generally warmer weather around the country, spurring firms to begin home building a bit earlier.
Manufacturing employment may have been showing signs of the much-awaited Asian effect. Southeast Asian financial difficulties are predicted to begin choking off demand from that part of the world, with manufacturing firms taking the hit first.
The number of manufacturing jobs declined 2,000 in February after having shown strong growth for the previous four months. A small gain in durable goods was offset by a general decline in nondurables, most notably in apparel.
Employment in the services industry rose by 146,000 in February, with large gains in supply services and computer and data processing underpinning the overall payroll figures, which had been predicted to gain just 253,000.
Wage pressures are always a key concern for investors and economists concerned about inflation, and the February figures showed that average hourly earnings for non-supervisory, non-farm workers -- another standard measurement -- increased 8 cents an hour to $12.60, seasonally adjusted. Analysts expected a more moderate increase of 5 cents.
However, Bureau of Labor Statistics economist Patricia Getz said the 8-cent gain may be overstated because of a statistical quirk.
"There's a phenomenon that we've noted in the last few months that we tend to have bigger increases in hourly earnings and average work hours when we have short months," said Getz, referring to February's 28 days.
"We are thinking that this is traceable to something that's not economic," she added. Getz said the BLS is preparing a study on the subject and expects to complete it in the next few months.
The U.S. bond market initially contracted from the stronger wage figures, which investors worried could precede a Federal Reserve interest rate hike. However, it rallied almost as quickly, with the benchmark 30-year Treasury bond up 2/32, pushing the yield back to 6.06 percent.
Doug Lee, chief economist at Washington Analysis Group, said the initial reaction of the bond market was over the strength of the wage figures, but predicted that little inflation will be seen in 1998.
"We have been able to pay for the wage increases we've seen over the last couple of years with very good growth in productivity," he said. "We are optimistic that that productivity growth is going to continue to be quite good."
Another factor entering into the volatile bond mix were U.S. money managers who, analysts say, were poised to jump in at the first sign of bond weakness, which occurred in the immediate wake of the figures.
Breaking down the rest of the job picture, the average workweek for non-supervisory, non-farm workers edged up six minutes to 34.9 hours, seasonally adjusted.
Average weekly earnings increased 0.9 percent to $439.74 during February. Since February 1997, average hourly earnings have risen 4.1 percent and average weekly earnings 4.4 percent.
U.S. President Clinton hailed the figures Friday as more evidence of a surging economy. "We continue to have the strongest economy in a generation, the lowest unemployment in a quarter century. We're on track to have the longest peacetime recovery in the history of our country." 
|
|
|
U.S. Labor Department
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
