American companies added more new jobs than expected in February and the jobless rate ticked back down to a near-50-year low, though analysts largely dismissed the numbers as a pre-coronavirus rearview-mirror look at the employment picture.
The economy added 273,000 new jobs last month, the Bureau of Labor Statistics reported on Friday, well above economists’ forecasts of 174,000 new positions. The unemployment rate edged back down to 3.5% from January’s 3.6%, a touch better than the FactSet consensus estimate.
Average hourly earnings rose by 0.3% last month, the same pace as in January and in line with analysts’ expectations. On a year-over-year basis, average hourly earnings gained 3%, also in line with January's gains and analysts’ forecasts.
The U.S. economy gained an average of 243,000 jobs per month from December through February, up from average monthly job growth of 178,000 in 2019.
While generally decent, the numbers were a rear-view-mirror look at a jobs market largely unaffected by the coronavirus outbreak, which as of the end of last month remained a far-away phenomenon that had not yet directly begun to impact American businesses.
Companies by and large were surveyed about their employee head count before the virus became an escalating U.S. concern.
There were 57,000 new positions in health care and social assistance last month. Food services and drinking places both added 53,000 while government employment grew by 45,000. Construction added 42,000, professional and technical services contributed 32,000 and finance rose by 26,000. Manufacturers also added 15,000 jobs.
However, analysts and investors paid little heed to the numbers, with stocks on track to post another day of triple-digit losses, amid expectations that February's job numbers were the best the U.S. economy will see for some time to come.
"Whatever the number, this report is old news," said Ian Shepherdson of Pantheon Economics before the jobs report was released. "The coronavirus is likely to start hitting job growth very soon, as hiring is scaled back and layoffs rise," he said.
Indeed, the U.S. economy faces a crucial test in the coming months as the coronavirus spread shutters factories, slows business activity and cripples transport demand globally, raising concerns of a near-term recession. The official number of coronavirus cases globally surpassed the 100,000 mark on Friday morning.
The Federal Reserve on Monday made a rare intra-meeting move to cut its benchmark fed funds rate by a half percentage point in response to growing concern about the economic impact of the coronavirus on the U.S. economy.
"Overall, these are great numbers, but unfortunately this is news from another planet, and it does not mean that the Fed was wrong to cut rates this week," Shepherdson said.