Job Gains Continue in February Amid Mixed Signals

Job growth continued in February. After a revised 504,000 job gain in January, total nonfarm payroll employment increased by 311,000 in February, and the unemployment rate edged up to 3.6% from 3.4% in January. Wage growth increased to a 4.6% year-over-year gain from 4.4% last month, but down compared to February 2022. Today’s job report indicates that, overall, the labor market is still strong, but showing signs of slowing of a strong start for the year.

Construction industry employment (both residential and non-residential) totaled 7.9 million and exceeds its February 2020 level. Residential construction gained 12,400 jobs, while non-residential construction employment gained 11,600 jobs in February. Residential construction employment exceeds its level in February 2020, while all non-residential construction jobs lost in March and April 2020 have now been recovered.

Total nonfarm payroll employment increased by 311,000 in February, following a gain of 504,000 in January, as reported in the Employment Situation Summary. The estimates for the previous two months were revised downward. The estimate for December was revised down by 21,000 from +260,000 to +239,000, while the January increase was revised down by 13,000, from +517,000 to +504,000. Despite tight monetary policy, over 4.3 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike in more than three years.

The unemployment rate edged up to 3.6% in February. The number of employed persons increased 177,000, while the number of unemployed persons rose 242,000.

Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, edged up 0.1 percentage point to 62.5% in February, reflecting the increase in the number of persons in the labor force (+419,000). Moreover, the labor force participation rate for people who aged between 25 and 54 increased to 83.1%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people who aged between 25 and 54 is back to the pre-pandemic level.

For industry sectors, leisure and hospitality (+105,000), retail trade (+50,000), government (+46,000), professional and business services (+45,000), and health care (+44,000) have notable job gains in February.

Employment in the overall construction sector rose by 24,000 in February, following a 35,000 gain in January. Residential construction gained 12,400 jobs, while non-residential construction employment gained 11,600 jobs in February.

Residential construction employment now stands at 3.3 million in February, broken down as 939,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,917 a month. Over the last 12 months, home builders and remodelers added 90,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,292,600 positions.

In February, the unemployment rate for construction workers decreased by 0.3 percentage points to 4.9% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic.