US economy smashes estimates, adds 273,000 jobs in February amid coronavirus outbreak

AP Photo/Ted S. Warren
  • The Bureau of Labour Statistics said 273,000 nonfarm payrolls were created last month.
  • That was compared with 225,000 in January, exceeded economist forecasts calling for 165,000.
  • The report only reflects conditions through mid-February, so it didn’t signal the full impact of the spreading coronavirus.
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Government data out Friday showed the economy added jobs at a faster than expected pace in February, offering an upbeat snapshot of the labour market as the coronavirus outbreak began to spread from China to the US and dozens of other countries.

The Bureau of Labour Statistics said 273,000 nonfarm payrolls were created last month, compared with 225,000 in January and economist forecasts for 175,000. The unemployment rate edged lower to 3.5%, its lowest level in half a century.

Average hourly earnings rose 3% from a year earlier, far below the peaks seen in early 2019. While wage growth has continued to outpace inflation, it has held below the pace economists would hope for with historically strong employment levels.

The job growth came as the government announced in recent weeks that COVID-19 has killed nearly a dozen in the US and would almost certainly spread further, raising alarm about a potential downturn in the largest economy.

While international efforts to contain the respiratory illness have upended global supply chains and broader business activity, those impacts were not expected to be fully reflected in the February employment report.

“That’s coming later,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. “Early-stage accelerations in COVID-19 cases are now driving the aggregate numbers; worse to come.”

Read more: Goldman Sachs reveals the 10 best stocks to buy now for a market comeback from the coronavirus-driven plunge

But concerns have escalated significantly since employers were surveyed for the BLS report several weeks ago. In a bid to ease concerns among businesses and investors, the Federal Reserve on Tuesday called an emergency meeting to slash interest rates for the first time since the financial crisis.

The outbreak was expected to stall a recent truce in a tit-for-tat trade dispute between the US and China, which has raised costs for employers and clouded the investment outlook. Tariffs have created particular challenges for the manufacturing sector, which shed another 12,000 jobs in January.

This story is developing. Please check back for updates.

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