Hiring surged in February before coronavirus spread in U.S.
The pace of hiring in the U.S. jumped in February before the novel coronavirus spread across many parts of the country, new federal data show.
Employers added about 273,000 jobs last month, the Labor Department said Friday, surpassing forecasts. The gains were spread widely among sectors. Health care, food services, construction, professional services and government all saw job gains. The unemployment rate ticked down to 3.5%.
Average hourly pay for workers increased 3% from the year before, an indication that wage growth remains muted despite the nation's low unemployment rate.
"The unemployment rate has been at or below 4% for two years, and wage growth is, if anything, decelerating," Heidi Shierholz, senior economist at the Economic Policy Institute, said on Twitter.
Businesses and economists are viewing the latest job numbers with caution, wary of any slowdown from the spread of the coronavirus. The surveys that form the basis of the government's monthly employment report were taken in the second week of February, before the outbreak had begun to spread widely across the U.S.
"Pre-virus, the labor market was strong, if weather-assisted. Now, trouble is coming — fast," Ian Shepherdson of Pantheon Macroeconomics told investors in a note.
The industries most responsible for the surge in hiring are service industries that rely on face-to-face interaction, and they stand to suffer if many people in the U.S. practice the "social distancing" health authorities have advised.
"Another strong jobs report underscores the resilience of the U.S. services sector — which accounts for the lion's share of employment — at least until February," said Brian Coulton, chief economist at Fitch Ratings. "The fallout from China's sharp downturn and the changes in U.S. firms and households behavior in response to the COVID-19 outbreak, including reduced travel, will doubtless take a toll on service sector and broader U.S. economic activity from March."
The Federal Reserve slashed interest rates on Tuesday in an emergency cut intended to protect the economy from coronavirus-related disruptions. Since then, Fed officials have warned that the outbreak is already taking a toll.
"We are now also hearing reports that some businesses here in the United States are being affected by supply disruptions and weakening demand," Federal Reserve Bank of New York President John Williams said in a speech in New York City on Thursday ahead of the government's latest employment report. "As people take precautions, we're seeing concerns around the tourism and travel sectors, in particular."