The creation of employment in U.S it practically stagnated last February, when registering only 20,000 employed. The market consensus anticipated an important moderation, but not as sharp as that announced in this first reading. In January, recruitment advanced at a rate of 311,000 employees. In the meantime, the unemployment rate decreased by two tenths and stands at 3.8% for the time being. Wages, meanwhile, rise.
It is the worst rate of job creation since September 2017. The indicator also took by surprise Wall Street, where investors are divided among those who believe that it is the first evidence that the economic slowdown -which the main international organizations and the analysis houses have already been alerting- is taking shape or if it is a temporary blip due to the effect combined snowfall and noise caused by the partial closure of the activities of the federal government after the political clash to finance the wall with Mexico. In any case, cooling is evident.
Analysts expected something more in the environment of the 180,000 employed and unemployment to remain at 3.9%, compared to 4% in January. The bad registration is explained, mainly, because the construction sector destroyed 31,000 jobs last month and the indicator is flat in the restoration. That could indicate seasonal factors, but it also confirms that the economy continued its slowdown process.
The blip does not diminish the improvement of the labor market in recent years: it has already 101 months of job creation; Salaries rose 3.4% in the year, the best reading since the beginning of the economic recovery, a decade ago, and is two tenths higher than expected. If the hiring rhythm had been more solid, this detail could have justified the Federal Reserve came back into play.
It will not be the case, at least in the short term. The president of the Fed (the US central bank), Jerome PowellI had been talking for two months about patience when it came to advancing in the normalization process of monetary policy. He justified it by saying that the signals coming from the economy are conflicting and there are opposing currents that at this moment invite caution. The confidence indicators reflect that uncertainty.
Wall Street futures reacted negatively and the dollar depreciated slightly. It also lowered the interest rate of the Treasury bills to 10 years, which moves in the vicinity of 2.6%. The next meeting of the Fed is scheduled for March 20. Up to now, two type increases were seen as possible, with the most immediate coming in June. But the data moves away that possibility and reduces it.
The reading of employment is known a week after the growth indicator was published in 2018. The expansion progressed at a rate of 2.9%, slightly below what was promised by President Donald Trump. The Fed anticipates that it will moderate to 2.3% this year. It is attributed, among other reasons, to the weakening of the real estate sector, the global slowdown and the uncertainty of the tariff dispute.