In February 2018, the U.S. economy added 313,000 non-farm jobs, according to the latest employment report by the Bureau of Labor Statistics. The unemployment rate remained unchanged for the fifth straight month at 4.1%, a 17-year low. The sectors with the most job gains included construction (+61,000), retail trade (+50,000), and professional and business services (+50,000). Employment in temporary help services increased by 27,000. Other industries with significant gains included manufacturing, financial activities, mining, and healthcare.
Average hourly earnings rose by 4 cents to $26.75, slowing the annual increase to 2.6% from 2.9% in the previous month. According to the report,
Are We at Full Employment?
With the unemployment rate at a 17-year low of 4.1%, many are wondering if the U.S. economy has reached full employment. Treasury Secretary Steven Mnuchin argues that it has not because of the labor force participation rate.
According to the BLS, the labor force participation rate rose to 63% in February 2018, it’s highest level since September 2017; however, it still remains below historic levels.
“One of the issues with the participation rate is we’ve got to create more jobs, but we also have to make sure we have the proper training for people to have the jobs.” ~Steven Mnuchin, Treasury Secretary
Mnuchin also believes that a fuller unemployment measure should include “discouraged workers” who have stopped looking for work because they thought there were no openings. That unemployment rate (the BLS’s alternative U-5 index) tends to run a full percentage point higher than the commonly cited U-3 index.
According to an article by Bloomberg, the most obvious sign of full employment is growth that is significant enough to pressure the Federal Reserve’s inflation targets, and currently the labor market falls short of this benchmark. While the unemployment has been low for a while now, the surprise has been the weak compensation growth despite low unemployment.