U.S. job creation decelerated sharply in February, adding only 20,000 positions as construction and multiple industries reported payroll declines, raising concerns about economic momentum. The Labor Department's report highlighted a 10-year expansion cycle nearing its peak, aligning with the Federal Reserve's cautious stance on interest rate adjustments.
Despite the weak job growth—its weakest since September 2017—unemployment dropped to 3.8% as federal workers returned from a 35-day government shutdown. A broader unemployment measure also fell to 7.3%, reflecting improved labor market conditions despite sector-specific challenges.
Wage growth accelerated to 3.4% annually, the highest since April 2009, driven by a calendar-related boost in February. However, construction employment fell by 31,000, the largest decline since December 2013, while leisure and hospitality added no jobs. Revised data showed 12,000 additional positions created in December and January.
Economists noted slowing hiring momentum linked to fading weather effects and tighter labor markets. Manufacturing and services sector surveys also indicated employment declines, while the Fed reported mixed hiring trends across its districts. Despite these signs, wage inflation remained moderate, with labor costs rising 1.4% in 2018—the smallest increase since 2016.
