There’s falling short of expectations … and then there’s job creation in February 2019. Economists had predicted a mild slowdown to 180,000 new jobs, but instead the US economy ground to a near halt on job creation, adding only 20,000. Unemployment fell to 3.8%, but that turned out to be a function of a drain on the workforce numbers, as well as the aftereffects of the government shutdown:

Total nonfarm payroll employment changed little in February (+20,000), and the unemployment rate declined to 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment in professional and business services, health care, and wholesale trade continued to trend up, while construction employment decreased.

The unemployment rate declined by 0.2 percentage point to 3.8 percent in February, and the number of unemployed persons decreased by 300,000 to 6.2 million. Among the unemployed, the number of job losers and persons who completed temporary jobs (including people on temporary layoff) declined by 225,000. This decline reflects, in part, the return of federal workers who were furloughed in January due to the partial government shutdown.

In one piece of good news, revisions from the previous two months added another 12,000 jobs to the overall total. Workforce participation rates remained steady — 63.2% for the labor force participation rate and 60.7% for the employment-population ratio — so it doesn’t appear that job losses have picked up much, at least not yet. Reuters still notes that the signs of a slowdown in the economy are beginning to grow, and not just starting with this one jobs report:

The slowdown in hiring was flagged by first-time applications for jobless benefits, which were elevated in February. Also, Institute for Supply Management surveys showed measures of manufacturing and services sectors employment dropped in the month, while the Fed on Wednesday reported “modest-to-moderate gains” in employment in a majority of the U.S. central bank’s districts.

Though the economy grew 2.9 percent in 2018, the strongest in three years, it lost momentum as the year ended. Retail sales, homebuilding, business spending and exports all declined in December, setting the economy on a slower growth path.

Needless to say, 2019 would be an inconvenient time for an economic slowdown for Donald Trump. His 2016 campaign succeeded in making the argument that deregulation and tougher trade relations would unlock a widespread and self-sustaining economic boom. Republicans didn’t benefit much from that economic growth in the midterms, mainly because the conversation shifted to immigration and the border, but it’s tough to see how Trump and the GOP can succeed in 2020 without steady growth.

Of course, this is just one month, as Trump economic adviser Larry Kudlow told CNBC this morning. “I think it’s a very fluky number,” Kudlow said of job growth in February, and at least one other economist agreed:

“A shockingly low jobs figure for February does not change the labor market narrative by itself,” said Ben Ayers, senior economist at Nationwide. “The three-month trend in job gains remains solid while survey data suggest no letup in demand for workers by employers.”

Moreover, there were other brighter signs in the data as well. Wage growth spiked upward in February, and the U-6 unemployment number declined significantly as well:

A more encompassing unemployment rate that counts discouraged workers as well as those holding jobs part time for economic reasons, often called the “real” unemployment rate, plunged to 7.3 percent in February from 8.1 percent in January. Those employed part time for economic reasons tumbled by 837,000 to 4.3 million while those completing temporary jobs fell by 225,000, which a Labor Department office said was a consequence of the government shutdown that ended in late February. …

There was other good news in the report: Average hourly earnings increased by 3.4 percent on year over year, easily the best of the economic recovery that began nearly 10 years ago. That compares with a 1.5 percent increase in the consumer price index for all urban consumers from January 2018 to January 2019. Economists had been expecting a wage increase of 3.2 percent.

It’s a dramatic drop in the U-6 month on month, but there’s more context to that as well. The U-6 had climbed back up since hitting its previously lowest level in August of last year at 7.4%. The 8.1% level in January was a leap upward from December’s 7.6%. Hitting 7.3% is good, but there may not be much drama associated with it … except for its curious juxtaposition with the worst job-creation month in nearly two years.

The expansion in wage growth is an unalloyed piece of good news, but for how long? If this jobs report is just a hiccup, then there’s no reason to worry. If it isn’t, the lack of pressure from new jobs will start pulling wage growth down, an impact that workers will feel across a broad spectrum as the months roll on. Those months now will be rolling on into Trump’s re-election campaign, so the White House will be emphasizing the “fluky numbers” explanation. They’d better hope they’re right.