Following a somewhat lackluster January jobs report, questions over the sustainability of the robust economic growth recorded in the final months of 2015 – when gains averaged 221,000 jobs every month – have finally begun to be answered.
On Friday, March 4, the government released its jobs report for the month of February. After two months of global market instability, it appears the labor force has regained its balance just when it was needed most. Financial anxiety has so far been a hallmark of campaign speeches and Wall Street trading in early 2016. That may soon change though, as market uncertainty realizes a reprieve with jobs growth exceeding expectations. Keeping pace with the progress were compliance and wealth management jobs, assuring that finance industry hiring will stay strong for the year ahead.
Employment rate picks up
Because January’s employment situation proved uneven – job gains disappointed, but unemployment dipped below 5 percent for the first time since February 2008. February’s employment summary was considered a more definitive status report on the strength of the U.S. economy and the results were a welcome comfort to uneasy analysts.
According to the Bureau of Labor Statistics, employers added 242,000 jobs in February. The payroll gain marked the 65th consecutive month of job creation. On top of that, revisions to December and January’s figures showed there were collectively 30,000 more jobs created than previously thought, The New York Times reported.
“We’ve got a real strong job market going,” Carl Tannenbaum, chief economist at Northern Trust, told The Times. “It does suggest that fears about a U.S. recession have been greatly overdone.”
For an idea of how dramatically the situation has improved, look back at four years ago. At this point in 2012, the unemployment rate was 8.3 percent and an economic recovery still seemed far away. Now unemployment has fallen to 4.9 percent (unchanged from January’s rate) and the private sector boasts 72 straight months of job growth. The Times classified that as the longest streak ever recorded.
While 4.9 percent unemployment is consistent with what the Federal Reserve’s definition of full employment is, broader measures which include workers still sitting on the sidelines of the recovery have fallen as well. The Wall Street Journal reported that full unemployment now stands at 9.7 percent, down from 9.9 percent in January.
Wages were a rare area of disappointment. They fell by 0.1 percent in February after increasing 0.5 percent in January – equating to a 2.2 percent improvement in the yearly rise.
“Financial activities grew by 6,000 jobs in February – an undeniably solid showing.”
Finance hiring solid
By far the showiest of growing industries were the education and health services sectors, which added 86,000 jobs in February. Retail trade, restaurants and bars, as well as construction, weren’t far behind. But the finance industry held its own, particularly with regard to oil and gas investment banking jobs which are thriving as the bruised energy sector looks for creative survival options.
The BLS Employment Situation Report showed that the financial activities industry added 6,000 jobs last month. While that’s lower than January’s 16,000 total, it’s likely to be revised upward with next month’s jobs report. It’s also important to remember that January, the start of a new year, is a hot hiring month.
What should be taken away from February’s report is that finance industry hiring remains steady. Despite global turmoil, finance has proven itself resilient and adaptable to changing circumstances.