The economy created 313,000 jobs in February greatly exceeding analysts’ expectations. There were good gains in both construction and manufacturing. The total number of seasonally adjusted (SA), non-farm people employed in the U.S. in February was 148.177 million (M), an increase of 0.21% month on month, (m/m). Over the past 12 months the U.S. economy has added 2.281M jobs, or +1.6% for an average of 190,000 per month.
Of the 313,000 jobs created in February, 287,000 were in the Private sector and 26,000 originated in Government. The big volume gainers in the Private sector were Retail Trade, (+50,000), Financial Activities, (+ 28,000), Education and Health services, (+23,000) and Leisure and Hospitality (+16,000). Within Government, 31,000 jobs were initiated at the local level, reduction of 7,000 at the Federal level, while State governments added 2,000 jobs.
The SA service providing sector employed 127.859M people in February, up 213,000 jobs, 0.17% m/m and higher by 1.927M or 1.5% y/y. Service providing employment in February accounting for 86.3% of the non-farm workforce, up 0.10 point month on month.
The SA goods producing sector employed 20.500M people in February, up 100,000, (+0.49%), m/m and up by 567,000 or 2.9% y/y. On a percentage basis, the goods producing sector is creating twice as many jobs as the service providing segment, a significant change.
Figure 1 shows manufacturing and construction employment on the same chart from 2005 to present. Both manufacturing and construction employment are showing growth, construction is growing at a faster rate on a percentage basis.
The SA manufacturing sector employed 12.614M in February, up 31,000 or 0.25%, m/m and higher by 224,000 (1.8%), y/y. The two largest employment categories within manufacturing are motor vehicles and parts and transportation equipment. There were 963,500 employed in the manufacture of motor vehicles and parts, +6,000 change m/m or +0.65%. On a y/y basis, jobs in this sector were higher by 22,000 or +2.40%. The transportation equipment field employed 1.652M. Jobs in this sector were up by 8,000, +0.50% m/m and were stronger by 35,000, +2.2% y/y.
The construction sector employed a total of 7.173M, up 61,000, (0.86%), m/m and up by 264,000, (3.8%), y/y. Most construction workers are employed constructing buildings. In February there were 1.582M workers constructing buildings, up 16,000, +1.0% m/m and up 54,000, +3.5% y/y. Heavy civil engineering was the next largest construction segment employing 1,007,300 in February, up 8,000, +0.75% m/m and higher by 20,000 or +2.0% y/y. Highway, streets and bridge construction, (not SA) employed 254,300, down 38,900, -13.3% m/m, but higher by 2,500 or +1.0% y/y. Industrial building construction, (not SA) employed 158,800, down 7,000, -4.5% m/m, but higher by 2,600, +1.7% y/y. Commercial building construction, (not SA) jobs declined by 14,000 m/m, -2.2% to 609,400 workers m/m. This was the second month in a row of significant job losses in this sector, a seasonal affect. On a y/y basis commercial construction jobs increased by 15,700, a +2.6% gain.
At Gerdau, we keep a keen eye on the employment numbers, especially manufacturing and construction since this is where most long product steel ends-up. In addition we know that growth in net job creation correlates to increased steel consumption.