“Nine years into an economic expansion, jobs reports don’t get much better than this.”
Total nonfarm payroll jobs rose by 313,000 — dramatically beating expectations — and the overall labor-force-participation rate jumped from 62.7 percent to 63 percent. Meanwhile, the participation rate among men aged 25 to 54 reached its highest level (89.3 percent) since September 2010.
As for the headline unemployment rate, it stayed at 4.1 percent — a 17-year low — for the fifth consecutive month, with the respective unemployment rates among blacks and Hispanics falling very close to all-time lows.
“This is not the kind of data you expect in an expansion that is nine years old, or out of a labor market that is already at full employment,” writes Irwin. “It suggests that employers are filling jobs not merely from people they’ve poached from competitors, but also from more people who have entered the work force.”
Indeed, as someone who believes the long-term decline of work among prime-age American men represents a genuine social crisis, I’m particularly encouraged that the participation rate among men aged 25 to 54 — which stayed below 89 percent for six and a half years between mid-2011 and late 2017 — has now been at or above 89 percent for three straight months.
The only news that was somewhat disappointing concerned wages: The year-over-year increase in average hourly earnings was just 2.6 percent in February, down from 2.8 percent in January. (The January figure was originally reported as 2.9 percent and then revised.)
Yet as Irwin notes, “Since October, average hourly earnings are up more than 1 percent, which if annualized comes to 3.2 percent, meaning that despite a soft February number this winter has been a time of acceleration in wage growth.”
He also makes an important point about wages and U.S. monetary policy: The January jobs report triggered a major sell-off in the stock market, as investors feared that rapid wage growth would prompt the Federal Reserve to raise interest rates more aggressively than expected.
“But the February numbers,” Irwin adds, “are a delicious sweet spot for the economy. Many more people are working, including people who hadn’t even been in the labor force. If that trend continues — and it’s worth adding the usual caveat that each month’s jobs numbers are subject to revision and statistical error — there’s no reason to think this expansion is reaching its natural end.
“Yes, it would be nice to see paychecks rise faster, but the saving grace of the fact that they aren’t is that it allows the Fed a little more room for patience, strengthening the arguments of the ‘let it run’ faction inside the central bank.”