Nonfarm payrolls increased by 313,000 new jobs during February helped in part by the largest gain since 2007 in jobs related to construction, said the Department of Labor on Friday.
Last month’s jobs increase was the largest since July of 2016 and far above the close to 100,000 new jobs each month the economy requires to keep up with the growth of the working age population.
The average earnings per hour moved higher by four cents, equal to 0.1%, to end the month at $26.75, a slowdown from a January rise of 0.3%. That helped to lowered the increase year on year in average earnings per hour from January’s 2.8% to 2.6%.
The rate of unemployment did not change, remaining at 4.1% a low of 17 years, as more people came into the labor force through a sign of confidence in the U.S. jobs market. The workweek average bounced back from 34.4 hours during January to 34.5.
With officials from the Federal Reserve considering that the U.S. labor market is close to or even beyond full employment, moderation in the growth of wages in February will likely do little to bring about a change in the central bank’s expectations of more interest rate increases at its policy meeting later this month.
Slow growth in wages however, might temper the expectations the Fed will make a change to its forecast of three increases in 2018 to four.
Optimism exists that tightening the labor market conditions could create faster growth in wages in 2018 and would pull inflation closer to the 2% target the Fed has.
Economists had forecasted that payrolls would increase by 200,000 in February and that unemployment would fall to 4.0%. The average earnings per hour were expected to increase 0.2% during February.
The report on employment suggested that the economy continued strong during February despite weak spending by consumers, weak home sales and a wider trade deficit during January that caused economists to lower growth estimates for the 2018 first quarter.
The estimates for gross domestic product for the first quarter are 2% as an annualized rate. The economy expanded at a pace of 2.5% during the 2017 fourth quarter.
Economists are expecting the rate of unemployment to drop to 3.5% during 2018.