U.S. Added 313,000 Jobs in February. Here’s What of which Means.

The wage figures were disappointing for workers.

The jump in January — which pushed the year-over-year figure to 2.9 percent, by 2.3 percent just three months earlier — was cited as a cause of a market sell-off. With February’s puny growth of 0.1 percent, the year-over-year increase dropped to 2.6 percent.

however for Wall Street, the strong job growth in addition to moderate wage growth will be a dream report.

While the signs of stronger wage growth have been welcomed by workers, they have fueled inflation worries on Wall Street in addition to speculation of which the Fed might raise rates at least four times of which year, rather than the three increases expected. “of which’s where the conversation will turn,” said Jonathan Golub, chief United States equity strategist at Credit Suisse. of which month’s figures will help dampen of which speculation.

Ellen Zentner, chief United States economist at Morgan Stanley, agreed. The January report was “a pretty positive backdrop for household income, in stark contrast to last year, when wage growth was stagnant in addition to income growth was slowing on a year-over-year basis.” Still, she added, of which “reset expectations of which we are in an environment where the labor market will be tighter in addition to inflation will be more likely.”

Inflation fears might be dampened if productivity numbers were to rise more sharply. When of which happens, companies can pay workers more without eating into their bottom lines. however if productivity doesn’t improve, competition of which drives up wages might end up trimming corporate profits.

While some companies have prominently announced worker bonuses of which year after the signing of the tax bill, those kinds of rewards — as opposed to pay raises — are not counted inside average hourly wage calculations by the Bureau of Labor Statistics.

With President Trump’s move to put tariffs on steel in addition to aluminum imports in addition to growing talk of a trade war, February’s numbers could establish a baseline to measure the impact of trade restrictions in addition to retaliation over the coming months.

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A worker, Dylan McCone, at Camden Yards Steel in Camden, N.J. February’s job numbers could establish a baseline to measure the impact of President Trump’s steel in addition to aluminum tariffs over the coming months.

Credit
Joe Lamberti/Camden Courier-Post, via Associated Press

Bidding for Workers

Corporate executives have long complained about the difficulty of finding workers, particularly in sectors like construction in addition to trucking. Economists have generally reacted with skepticism, arguing of which if there were genuinely a shortage of qualified workers, companies might be raising pay to compete for talent. There are growing signs of which of which will be at last the case.

“For years in addition to years, the trucking companies said they couldn’t find drivers, however they wouldn’t raise wages,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “Well, currently they are.”

Competition for drivers has become fierce. Ms. Swonk said she had heard reports of trucking companies paying drivers six-figure salaries, plus $20,000 signing bonuses to lure them by competitors. Companies are also offering to train completely new drivers — even though many end up being poached by additional companies. “They’re still losing them to additional places,” Ms. Swonk said.

As for the construction industry, Jed Kolko, chief economist at Indeed, an online recruiting site, noticed a significant increase in job postings over the past week without a corresponding response by applicants.

“of which’s a Great example of where demand on the employer side will be going, however of which’s not being matched by job-seeker interest,” he said.

The mismatch could grow significantly under Mr. Trump’s plan to encourage local, state in addition to private investment in infrastructure. “If there will be public interest in infrastructure, where do workers come by?” Mr. Kolko asked. “Does of which end up bidding up construction wages in addition to competing with additional kinds of construction activity already underway?”

Those Left Behind

In contrast to the multiple indicators of a tightening labor market, a persistent lack of employment among large numbers of working-age men continues to shadow the economy.

Although large economic differences across regions have always been a characteristic of the United States, of which gap appears to be widening instead of narrowing. In a paper published inside latest edition of the Brookings Papers on Economic Activity, the economists Benjamin Austin, Edward Glaeser in addition to Lawrence H. Summers argue of which the disparities are sharp among three regions: the prosperous coasts; the Western heartland, which has natural resources in addition to higher education levels; in addition to the Eastern heartland.

of which last area, which extends by Mississippi to Michigan, generally east of the Mississippi in addition to not on the Eastern Seaboard, will be suffering by a glut of social in addition to economic ills, including joblessness, disability, opioid-related deaths in addition to rising mortality, the three Harvard University economists said.

“The income in addition to employment gaps between three regions are not converging, however instead seem to be hardening,” they write. “America appears to be evolving into durable islands of wealth in addition to poverty.”

Rather than moving to higher-income areas to take advantage of the increased employment opportunities, people remain stranded in areas of which are economic dead ends. There are many theories about the cause, however rising housing costs certainly deter moving, as does the difficulty of transferring assistance like Medicaid across state lines.

A lack of employment will be a greater problem than income inequality, they argue, citing evidence of which suggests “misery haunts the lives of the long-term not working.”

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