Jobs Report Exceeds Expectations for February

jobs report february 2019 unemployment

The ADP Research Institute reported an increase of 183,000 new jobs for February, exceeding expectations. Growth was seen predominantly in the construction industry and medium size companies. Construction growth is generally seen as a positive signal of market strength as it tends to stall when economic growth begins to slow.

Small businesses did not fare as well with the lag, largely attributed to higher wages and a more competitive hiring environment. Small companies often struggle to match the benefit packages offered by larger employers and this can slow growth in this sector when the job market is tight.

Despite the relatively high number of new jobs, some may view this report as representative of an economic slowdown. Job growth over the past decade has slowed down but only in comparison to one of the hottest job markets in history. Stemming from the aftermath of the financial crisis of 2008, the US experienced historic economic growth in the years that followed. Referencing the unemployment rate as a guide, the current economy has hovered around rates not seen since the 60’s.

With the ADP’s number exceeding the predicted 180,000 jobs for tomorrow’s report, it is hard to make a serious case the economy is in dire straits. Yes, these numbers may be lower on average than 5 years prior, but they still represent significant hiring activity in the shortest month of the year.

This report will likely not be much of a market mover considering it will not surprise speculators. As with any economic report, there is always the chance something sparks a rally or sell off. Traders should be prepared for these events and take appropriate risk management measures to protect themselves.

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