**MNI DATA ANALYSIS: US February Payrolls +20k; Rate 3.8%>

--January Payrolls Rev Up To 311k, December Jobs Rev Up to 227k

--Housing Starts Pace 1.230m In January

By Kevin Kastner, Shikha Dave and Harrison Clarke

     WASHINGTON (MNI) - Payrolls growth was much weaker than expected in 

February, following slight upward revisions to the very strong 

December and January gains. However, the unemployment rate fell to 3.8% 

and hourly earnings were stronger than expected, raising the year/year 

rate to 3.4%. 

     Here are some of the key takeaways from the data released Friday: 

     - The February employment data were much weaker than expected, but 

followed upward revisions to January and December. Payrolls growth 

posted a 20,000 gain compared with the 180,000 Bloomberg consensus and 

the 183,000 gain expected by an MNI survey. This followed upward 

revisions to January (+311k vs +304k prev) and December (+227k vs +222k 

prev) for a net upward revision of 12,000. 

     - The unemployment rate fell to 3.8% after an increase to 4.0% in 

January, while the labor force participation rate remained at 63.2%. The 

size of the labor force fell by 45,000, with the number of employed 

rising and the number of unemployed falling sharply. Analysts expected a 

3.9% rate. 

     - Hourly earnings rose 0.4% after a 0.1% January gain. The 

Bloomberg consensus and MNI surveys both looked for 0.3% gain. As a 

result, the year/year rate for earnings rose to 3.4% from 3.1% in the 

previous month. Average hours worked fell to 34.4 in February from 34.5 

in January. 

     - Private payrolls rose 25,000, compared with a 175,000 increase 

expected by Bloomberg and a 170,000 gain expected in an MNI survey, with 

construction and retail trade down, and other categories up only 

modestly. The key exceptions were professional and business services and 

health care.  

     - In other data released, the delayed January data showed that the 

pace of housing starts rebounded to 1.230 million, above the 1.190 

million rate expected by Bloomberg and the 1.178 million rate expected 

by MNI, but are still down 7.8% from a year ago. The pace of building 

permits rose slightly in the month but were also down 1.5% from a year 

ago. 

     Additionally, homes permitted but not started posted an increase, 

suggesting housing starts could rise in the near future. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]