The Jobs ReportFebruary 2019

The economy added 20,000 jobs in February and the unemployment rate fell 0.2 percent to 3.8 percent, according to the Bureau of Labor Statistics. The 20,000 nonfarm payroll gain was well below economists’ expectations and followed an upwardly revised 311,000 gain in January. Average hourly earnings rose more strongly than in January, at 0.4 percent month over month and 3.4 percent year over year.

Check out Marketplace's analysis on the latest jobs report.

The monthly jobs report is used by the media and politicians as a proxy for the overall health of the U.S. economy. But it has its limits as an indicator of how the economy is doing in the short term.

How the numbers are calculated

The number of jobs added or subtracted from the economy is based on a monthly survey of private and government employers. But it’s just a first estimate — it will be revised twice more as additional data comes in. And the margin of error is 115,000.

What does that mean? The report says we added 20,000 jobs, there’s a 90 percent chance the actual number is between 135,000 jobs added and 95,000 jobs lost.

Economists prefer to rely on consecutive employment reports over several months to get a reliable picture of the job market.

The unemployment rate: more than meets the eye

What does the headline unemployment number we see every month — 3.8 percent in February — mean?

It’s called the U-3 unemployment rate, and it counts as “unemployed” any adult, 16 or older, who:

  1. Isn’t working
  2. Is available for work
  3. Has actively looked for work in the past four weeks.

But the U-3 doesn’t include everyone who is without a job and wants one. It only counts those who have actively job hunted recently.

The Bureau of Labor Statistics also calculates a more comprehensive unemployment rate, the U-6. That also includes:

  • Marginally attached workers— those who want and are available for work, are not currently looking for work but have looked sometime in the past year."
  • Discouraged workers — a subset of the marginally attached category — who say the reason they haven’t looked is that they don’t think there’s any work for them.
  • Involuntary part-time workers — those who have part-time work and want full-time work, but have been unable to find it.

When we include these additional workers, the U-6 combined “total” unemployment rate in the February jobs report jumps to 7.3 percent.

U-3 headline unemployment rate
3.8%
Discouraged workers
0.3%
All other marginally attached workers
0.6%
Involuntary part-time workers
2.6%
U-6 total unemployment rate
7.3%

So how is the economy doing?

Overall, the U.S. economy is strong. Its expansion is 10 years old, and gross domestic product rose 2.9 percent (annualized) in 2018 — tied with 2015 for the fastest growth since the Great Recession. Consumer spending is robust, wage increases have been accelerating and business confidence is high. Unemployment is at near a 50-year low, and job openings are at a record high.

But it’s not all good news: financial markets have been volatile; housing has stalled; trade tensions remain a concern.

And when it comes to the economy, no matter what the numbers say, it’s only as good as you feel about it. Sentiments differ based on age, race and gender. Plus, the wealth gap is wider than ever.

In 2007, the median net worth of upper-income families was $740,100
40 times higher
than the $18,500 of lower-income families.

By 2016, That disparity jumped to
75 times higher.
Median net worth for 2016 was $810,800 and $10,800 respectively

source: Pew Research

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