US job growth surges in February, wage growth slows

The number of new jobs in the US surged in February, beating analysts expectations.

The US saw 313,000 jobs created last month, the strongest gain that has been seen since July 2016.

Wage growth, however, slowed to 2.6 percent while unemployment remained stagnant at 4.1 percent.

“We have had an enormous degradation in the quality of jobs in the last 25 years and have become far more dependent, especially since the recession, on low wage, low hour jobs. And these jobs really don’t pay very much at all,” said Daniel Alpert, managing partner at Westwood Capital and a senior fellow in financial macroeconomics at Cornell Law School.

“From 1997 to 2017 we lost five million manufacturing jobs now we are adding them back at the rate of tens of thousands. It would take forever to add them back and we never will. As a result jobs growth is now too heavily dependent on low wage growth. There’s only so many ways to flip a hamburger,” he added.

Despite the lower-than-expected wage increase seen last month, economists remain optimistic that longer-term trends still suggest higher wages.

The biggest increase in new employment was in construction and retail. The sectors added 61,000 and 50,000 new jobs respectively. The manufacturing sector added 31,000 jobs.

Paul Ashworth, chief US economist at Capital Economics, feels positive about the US economy.

“The massive 313,000 increase in non-farm payrolls in February, the biggest in 18 months, together with the 54,000 upward revision to gains in the preceding two months, illustrates that the economy is doing much better than the recent incoming activity data have suggested,” he said.

“This is more evidence that the Fed will need to hike four times this year, starting later this month.”