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U.S. Job Growth Nearly Grinds To A Halt In February

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Employment in the U.S. showed only a slight increase in the month of February, according to a report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment edged up by 20,000 jobs in February after jumping by an upwardly revised 311,000 jobs in January.

Economists had expected employment to increase by about 180,000 jobs compared to the spike of 304,000 jobs originally reported for the previous month.

The much weaker than expected job growth in February represented the worst month since the loss of 18,000 jobs in September of 2017, when employment was impacted by Hurricanes Harvey and Irma.

The uptick in employment came as continued increases in professional and business services, healthcare, and wholesale trade jobs were partly offset by the loss of construction, retail and government jobs.

"The sharp slowdown in payroll employment growth in February provides further evidence that economic growth has slowed in the first quarter," said Michael Pearce, Senior U.S. Economist at Capital Economics. "That adds weight to our view that the Fed will not be raising interest rates this year."

Despite the much weaker than expected job growth, the unemployment rate dropped to 3.8 percent in February from 4.0 percent in January. The unemployment rate had been expected to dip to 3.9 percent.

The decrease in the unemployment rate came as the labor force shrank by 45,000 people, while the household measure of employment increased by 255,000.

The much weaker than expected job growth also did not stop the annual rate of growth in average hourly employee earnings from accelerating to 3.4 percent in February from 3.1 percent in January.

"With productivity growth also picking up in recent quarters, however, that won't be enough to generate a pick-up in inflation," Pearce said.

He added, "That frees up the Fed to focus on the incoming data on economic activity, which increasingly reinforce officials' patient stance."

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