Office-Using Employment for February Surprises to the Upside

Economic Pulse
March 7, 2014
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In combination with a revision to the prior two months that increased total payrolls by an aggregate 25,000, February’s gain of +175,000 was the largest increase in total payrolls in three months. Perhaps more importantly, office-using employment gains climbed to a seven-month high, rising by 72,000 (Table 1 and Chart 1).

The gain in total office-using employment occurred despite a negative contribution from the information sector, where payrolls continued to decline. In February, information jobs dropped by -16,000 on the back of a -14,000 decline in jobs in the “motion picture and sound recording” industry. The secular decline in this sector has been pronounced: whereas there were 3.55 million information workers in 2000, the sector count fell to 3.05 million in February 2007 and stands at 2.65 million as of February 2014.

Payrolls in the professional/business services sectors rose by +79,000, recovering from a somewhat mild gain last month of 42,000. The count of accounting and bookkeeping service jobs, which had declined by 20,000 over the prior six months, staged a partial recovery, climbing by almost 16,000 in February. Similarly, temporary help service jobs increased by 24,000, slightly above the average monthly gain of 19,000 observed over the last twelve months. Within financial activities, total payrolls rose by 7,800, boosted by the largest one-month change in the insurance sector since 2005.

February’s unusually harsh winter appears to have pushed wage growth lower as total workers’ hours—and not just those of the office-using segment—were trimmed more than usual (Chart 2). While average hourly earnings of all employees rose by 0.4% MoM and 2.2% YoY, average weekly earnings rose by less than 0.1% MoM and just 1.3% YoY, the smallest annual increase since February 2010, when similarly bad weather played a role in reducing the length of employees’ workweek. Retail sales have the potential to suffer in the short term as a result: in February 2010, retail sales rose just 0.1% MoM, below the 0.3% average monthly increase over the prior year, before rebounding toal gain of 2.2% MoM in March 2010.