WASHINGTON: US hiring falls sharply

WASHINGTON: Hiring in the United States was the weakest in 17 months in February while wage gains were the fastest of the expansion and the unemployment rate fell, a possible sign that America’s jobs engine is starting to slow down.

Nonfarm payrolls increased by only 20,000 after a big gain of 311,000 in January, a Labor Department report showed on Friday. Average hourly earnings rose by a better-than-projected 3.4% from a year earlier, while the jobless rate declined to 3.8%, near a five-decade low.

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Even with faster pay raises, the big miss on hiring might fuel concern about the mood among US consumers following a December retail-sales slump that was the worst in nine years. Economists project the expansion will slow this year, amid weaker global growth and the fading impact of fiscal stimulus such as President Donald Trump’s tax cuts.

At the same time, policymakers and economists might wait for several months of weak hiring before concluding there is cause for concern in the labour market. Some of the weakness could be chalked up to severe winter weather, as construction jobs fell by 31,000, though many other sectors were soft, including education and health services as well as leisure and hospitality.

Even with the pickup in wages, Federal Reserve policymakers have indicated this year they won’t raise interest rates again unless they see inflation advance. Fed Chairman Jerome Powell said in congressional testimony last week that “the job market remains strong”.

The 20,000 jobs created in February was the lowest since September 2017, a month marked by the impact of several major hurricanes.

Manufacturing payrolls increased by 4,000, trailing the 12,000 median forecast. Retail jobs fell by 6,100, while education and health services rose only 4,000 and leisure and hospitality payrolls were unchanged. One solid reading was professional and business services, with a 42,000 increase.

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The labour-force participation rate was unchanged at a five-year high of 63.2%, while the employment-population ratio, another broad measure of labour-market health, held at 60.7%.

Companies have said shortages of skilled workers limit expansion plans. In addition, broader headwinds include continuing uncertainty surrounding trade tension with China, a waning boost from fiscal policy and threats from abroad.

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