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U.S. Economy Creates 175,000 Jobs In February, Jobless Rate Rises To 6.7%
By Kitco NewsFriday March 7, 2014 8:30 AM
Editor's Note: The article was updated to include comments from CIBC and from the Labor Department's frequently asked questions section.
(Kitco News) - Despite weather conditions, the U.S. economy created 175,000 jobs in February, according to data from the U.S. Labor Department.
The Labor Department also said that the unemployment rate increased to 6.7 %. The Jobs data for January was revised higher to 129,000 jobs from the previous report of 113,000 jobs. The department also revised December's data higher to 84,000 jobs from the previous revision of 75,000.
Looking at the data, the participation rate and the employment-population ratio remained unchanged in February at 63.0% and 58.8%, respectively. The department also said that 2.3 million persons were marginally attached to the labor force, a decline of 285,000 over the year.
Average hourly earnings rose by nine cents to $24.31 and the average workweek decreased by 0.1 hour to 34.2 hours per week in February.
Avery Shenfeld, senior economist at CIBC World Markets, described February’s report as “solid,” with healthy gains in February and positive revisions in January and December. However, despite the new positions he said the total hours worked declined, “which implies less bang for the buck in terms of GDP, a result that could well be yet another signpost of adverse weather,” he said.
Shenfeld added the rise in the unemployment rate “gives the Fed yet more cushion in terms of thinking about the timing of a rate hike well down the road.”
Heading into the report, market participants were fairly pessimistic about the state of the U.S. economy and the potential job growth because of weather problems. According to media reports, economists were expecting to see jobs gains ranging from 150,000 to 160,000.
“With the poor weather extending into early February it will be some time before we get a clean read on the economy,” wrote Millan Mulraine, deputy head of U.S. research and strategy at TD Securities, in a note released before the report.
Economists and analysts were paying close attention to the unemployment rate as it is close to the Federal Reserve’s target. However, last week, new Fed Chair Janet Yellen clarified the central bank’s position when she testified before the Senate Committee on Banking, Housing, and Urban Affairs and said that despite the lower unemployment rate, the U.S. jobs market has not fully recovered.
“Six-point-five percent unemployment is not the committee’s definition of what constitutes full employment,” she said during her testimony. "The unemployment rate is not a sufficient measure of the labor market."
In the report, the Labor Department said there were severe weather conditions in much of the U.S. during the February reference period; however, they addressed the concerns weather could have on employment.
“Unusually severe weather is more likely to have an impact on average weekly hours than on employment,” the report said in its frequently asked questions section. “In order for severe weather conditions to reduce the estimate of payroll employment, employees have to be off work without pay for the entire pay period.”
By Neils Christensen of Kitco News; nchristensen@kitco.com
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