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Economy in Brief

U.S. Payrolls Advance
by Tom Moeller March 10, 2006

Non-farm payrolls rose 243,000 last month following a downwardly revised 170,000 increase during January that was initially reported at 193,000. Consensus expectations had been for a 210,000 increase during February.

From the household survey the unemployment rate rose modestly to 4.8% but remained near the five year low. Employment rose 183,000 (2.1% y/y) while the labor force rose 335,000 (1.5% y/y). An unchanged 4.7% unemployment rate had been the Consensus expectation for February.

Service producing payrolls surged 198,000 (1.5% y/y), the strongest gain since November, goosed by a 38,000 (0.7% y/y) rise in government employment which more than reversed the decline during January.

Jobs in private service-producing industries rose 160,000 (1.8% y/y) on the strength of a 22,000 (2.1% y/y) gain in financial activities employment and a 39,000 (2.8% y/y) worker rise in professional & business services. Job gains in education & health also rose a strong 47,000 (2.4% y/y) while jobs in leisure & hospitality jobs rose 25,000 (1.9% y/y).

Warm weather continued to bolster construction employment which added 41,000 (4.8% y/y) to an upwardly revised 55,000 gain during January.

Factory sector payrolls slipped during February. The 1,000 worker decline (-0.3% y/y) was the first drop since September and reflected fewer managers. The number of production workers on the job rose 3,000 (1.4% y/y) with durable goods industries adding 2,000 (2.3% y/y). Employment in the motor vehicles & parts industries fell 10,600 (-2.5% y/y). The breadth of gain in factory payrolls over the last three months slipped to a still firm 56.0%.

Average hourly earnings rose an expected 0.3% though factory sector earnings fell 0.1% (+1.8% y/y) and private service producing wages rose 0.4% (3.9% y/y).

Business employment dynamics: tabulations by employer size from the Bureau of Labor Statistics can be found here.

Employment Feb Jan Y/Y 2005 2004 2003
Payroll Employment 243,000 170,000 1.5% 1.5% 1.1% -0.3%
  Manufacturing -1,000 7,000 -0.3% -0.6% -1.3% -4.9%
Average Weekly Hours 33.7 33.8 33.7 (Feb '05) 33.8 33.7 33.7
Average Hourly Earnings 0.3% 0.4% 3.5% 2.8% 2.1% 2.7%
Unemployment Rate 4.8% 4.7% 5.4% (Feb '05) 5.1% 5.5% 6.0%
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