The wicked winter weather seen across most of the U.S. in February apparently did little to dampen hiring since U.S. employers added a better-than-expected 295,000 jobs over the month.

Labor market gains were fairly broad based with increases in food services, professional and business services, construction, health care, and transportation, according to Dodge Data and Analytics (DDA), formerly called McGraw Hill Construction. There were no revisions to December’s gain of 329,000 workers, although January’s increase of 257,000 was lowered to 239,000.

The underlying trend in the labor market is decidedly positive. Over the last year, monthly job gains averaged 266,000—exceeding the 250,000 level that most economists observe as a sign of a healthy jobs market. However, the rising trend has been skewed towards the last four months, with payrolls increasing by an average of 321,500 per month from November to February.

The unemployment rate, which is gleaned from a different survey than the jobs number, fell to 5.5%, the lowest rate in seven years.

The decline in the rate can be attributed both to a fall in the number of unemployed (a positive sign) and fewer people participating in the labor force (a negative sign).

The only piece of disappointing news in the report was, at a 2% year-over-year gain, wage inflation remains tepid. This is certainly an indication of the large amount of slack still in the labor market despite the gains in hiring over the last year, DDA says.

The construction sector added 29,000 jobs in February bringing the sector’s 12-month total to 321,000 new jobs. February’s gain was slower than the 49,000 added in January but is not surprising given that construction activity is more deeply affected by weather patterns than other employment categories, according to DDA. Within construction, specialty trade contractors added 27,200 jobs and nonresidential added 5,700 jobs. However, heavy and civil engineering jobs fell by 3,700 and residential construction employment fell by 500.

With the first quarter of the year coming to a close, the improving labor market trends are a sure sign that the economy is performing well and that GDP should stabilize from its disappointing 2.2% annualized growth in the fourth quarter.
Dodge Data & Analytics continues to see annualized GDP growth for the full year to be in the neighborhood of 3%. Sustained hiring throughout the year will be a boon for construction activity with starts expected to continue their measured pace of recovery.