America’s strong job growth is surprising even the experts. They predicted that there would be 175,000 new jobs in February. Instead, the economy created 273,000 jobs and the unemployment rate fell to 3.5 percent.
What’s more, December and January’s job numbers were adjusted upward by 243,000. And if you can stand it, here’s more.
The previous two months’ estimates were revised higher by a total of 85,000. December moved up from 147,000 to 184,000, while January went from 225,000 to 273,000. Those revisions brought the three-month average up to a robust 243,000 while the average monthly gain in 2019 was 178,000.
But before you pop the champagne corks and celebrate Trump’s re-election, there are storm clouds on the horizon. It looks like we’re in for some rough weather.
“While it’s too early to see the impact of the coronavirus on the labor market, we can say the labor market was in a good place before the virus began to spread,” said Nick Bunker, economic research director at job placement firm Indeed. “But the next few months will be a test of just how resilient this labor market is.”
The coronavirus is not likely to cause unemployment to rise. But layoffs are possible in some industries and a general slowdown in the economy will probably create some slack in the labor market.
But otherwise, the news is extraordinarily good.
Most of the indicators thus far have shown little damage. Jobless claims remain well within their recent trend, coming in at 216,000 in the latest reading Thursday. Job placement firm Challenger, Gray & Christmas also reported Thursday that planned layoffs actually fell 16% from January. And key ISM readings on both manufacturing and services show companies still plan to hire.
“Now more than ever, we need to focus on the labor market data,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “The consumer has kind of kept things afloat.”
Most of the consumer-related data points have been good, though the reports coming in now largely cover the early stages of the coronavirus scare and the sharp recent stock market volatility.
With the large measure of uncertainty around the disease, its impacts may be felt in increments rather than suddenly. But if cracks begin to form, the first notices likely will come in employment data.
If things break right and the administration doesn’t botch the response to the disease, the effects on the economy should have worked their way through most industries by the fall.
But the next few months are going to be dicey.