uploads///Non farm Payrolls and Unemployment Rate

Non-farm payrolls, average hourly earnings rise

By

Dec. 4 2020, Updated 10:53 a.m. ET

Non-farm payrolls rise

US non-farm payrolls rose by 295,000 in February 2015 from a downwardly revised January number of 239,000 compared to 257,000 reported earlier. However, the number of long-term unemployed who have been without jobs for more than 27 weeks stood at 2.7 million in February, little changed from a month ago. These people made up 31.1% of the unemployed.

Industry-wise, job gains were led by food services and drinking places, professional and business services, construction, health care, and transportation and warehousing.

Article continues below advertisement

Unemployment rate

The unemployment rate fell to 5.5% in February, the lowest since May 2008, from 5.7% a month ago. This was primarily because people dropped out of the labor force.

Both the employment-population ratio and the labor force participation rate were little changed in February. While the employment-population ratio was unchanged at 59.3%, the labor force participation rate edged down to 62.8% from 62.9% in January.

Among major worker groups, the seasonally adjusted unemployment rate for adult men edged down to 5.2% in February from 5.3% a month ago. For adult women, it fell from 5.1% in January to 4.9% in February.

Average hourly earnings

Average hourly earnings rose $0.03 month-on-month in February to $24.78, following a surge by $0.12 in January. From a year ago, hourly earnings are up 2.0%, lower than the historical trend. Utilities saw the quickest growth in hourly wages by 1.0%, to $22.94 an hour. Construction saw a 0.3% fall in hourly wages to $26.91.

Investor impact

The non-farm payrolls report affects industrials-related ETFs such as the SPDR Industrial Select Sector Fund (XLI) and the First Trust Industrials AlphaDEX Fund (FXR), and materials-related ETFs such as the SPDR Materials Select Sector Fund (XLB) and the iShares US Home Construction ETF (ITB). These two growth sectors are affected if the jobs report is a positive surprise. XLB has DuPont (DD), Monsanto (MON), and Dow Chemical (DOW) as its top three holdings. They comprise ~30% of the portfolio.

A pickup in hiring signals a general improvement in the economic situation. So this report also has an impact on broad-based ETFs such as the SPDR S&P 500 ETF (SPY), the SPDR Dow Jones Industrial Average ETF (DIA), and the iShares Core S&P 500 (IVV).

In the next article, we’ll look at another jobs report that impact markets, the ADP Employment Report.

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.