The American job-creation engine is running full throttle. The American wage-growth engine? Not so much.
While the latest nonfarm payrolls report showed gaudy headline numbers—295,000 new jobs and an unemployment rate down 0.2 to 5.5 percent—it was more of the same when it came to generating jobs that actually pay strong wages.
The biggest driver of employment growth in February was bars and restaurants, which created 59,000 new positions. That was well above the 35,000 12-month average for the sector and rivaled only by professional and business services, which added 51,000. Retail positions also were up 32,000.
Consequently, the average hourly wage gain was just 3 cents. On a monthly basis, it was barely a 0.1 percent gain and just 2 percent on an annualized basis.
One other notable trouble spot: The labor force contracted, losing 178,000 workers to take the participation rate down to 62.8 percent, just 0.1 point away from a 36-year low. That plunge in the participation rate has been a significant contributor in pushing down the jobless rate off its 10 percent recession-era high.
In all, there was a lot to like—and a lot left to be desired, as discussed in the above video.
CORRECTION: This version corrected the unemployment rate to 5.5 percent.