By Isaac Cohen*
Anxiety in the markets, because of the slowdown and volatility in China, low commodity prices and a strong dollar, was dispelled somewhat by the Labor Department last week’s report that the US economy in February created 242,000 new non agricultural jobs. The unemployment rate remained at 4.9 percent, after six years of sustained employment creation, despite a generalized slowdown in the rest of the world economy.
By sectors the performance was uneven. Manufacturing lost 16,000 jobs in February, mainly because the strong dollar constrained export expansion. Also, the mining sector, which includes oil and natural gas, lost 19,000 jobs, because of cutbacks in the production of both. Employment expanded in the service sector, including healthcare, hospitality and retail all gaining jobs in February. For instance, healthcare generated 34,000 new jobs.
Additionally, not all last month indicators were positive, because wages fell 0.1 percent, indicating the increase of 0.5 percent in January could not be sustained. On a yearly basis, wages increased 2.2 percent, barely above the rate of inflation. By contrast, participation in the labor force increased 0.2 percent in February, to 62.9 percent from 62.4 percent in September.
The question is how these mixed signals will be perceived by the next meeting of the Federal Reserve, on March 14-15.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.