US Economy Loses Steam, Adding Only 20,000 Jobs; Unemployment 3.8 Percent

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Slowing global growth, a trade war with China and signs of increased caution among US consumers have led many economists to forecast weaker growth in the first three months of this year. But the unemployment rate fell to 3.8 percent from January's 4 percent and earnings growth picked up. "The fact that our labor force grew a year ago by 109,500 shows that even with such a low unemployment rate, MA continues to attract additional workers into our labor pool to help grow our economy", said Labor and Workforce Development Secretary Rosalin Acosta.

U.S. employers added just 20,000 net.

The last month when hiring was this slow was September 2017, when only 18,000 jobs were added.

"The U.S. labor market is still in good shape", said Gus Faucher, chief economist at PNC Financial.

Employment at construction sites fell by 31,000 jobs, the biggest drop since December 2013, after increasing by 53,000 in January.

But the construction, retail, mining and transportation sectors shed a combined 45,000 positions while the education sector added only 4,000 workers, down from 64,000 the prior month.

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"The question is whether businesses are becoming more cautious because of weaker economic data and the return of volatility; or is the economy weakening a result of reduced business confidence?", he added.

Average earnings in February were 3.4 percent grew to $27.66 per hour, a respectable gain compared to January's increase of 3.1 percent from a year ago. The longest shutdown in USA history ended on January 25.

The labor-force participation rate, or the share of Americans working or looking for a job, held steady at 63.2% in February. And Americans spent less over the winter holidays, with consumer spending plunging in December by the most in five years.

The report was also unwelcome news to Wall Street, stocks lower and setting up equities to continue losses in what has so far been their worst week of the year.

The economy is forecast to be slowing to an annual growth rate of just 1 percent in the first three months of this year, down from 2.6 percent in the October-December quarter. Real gross domestic product increased at an annual rate of 2.6 percent in the fourth quarter of 2018.In the third quarter, real GDP increased 3.4 percent. Wages have generally been rising fastest for the lowest earning workers, a sign that it's getting harder to find people for all kinds of jobs even in restaurants and retail and that minimum wage increases in 19 states in January are having an impact.

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