Investors are cheering Friday’s report that the economy added 313,000 jobs in February while the labor force gained 806,000 entrants. This is remarkable for a recovery long in the tooth and shows that deregulation and tax reform are flowing into business confidence and hiring.
Payroll numbers were revised up by 54,000 for December and January, bringing the three month total to 727,000. The unemployment rate was unchanged at 4.1%, but labor force participation ticked up three-tenths of a percentage point to 63%. The increase in the labor force was the largest since 1983 excluding months in which temporary census workers were hired.
Employment growth was broad-based with large increases in construction (61,000), retail (50,000) and manufacturing (31,000). Manufacturers have added 224,000 jobs over the last year, including 66,000 in metals. Much of this growth has been in machinery and secondary metals fabrication—e.g., welding and forging—which will be harmed by President Trump’s steel and aluminum tariffs.
The best news is that the hiring burst may finally be pulling lower-skilled workers off the sidelines. Labor participation last month rose by 0.9 percentage points among blacks, 1.7 points among black teens and two points for workers without a high-school diploma.