US economy added 311,000 jobs in February, beating expectations
The US economy added 311,000 jobs in February, according to the latest monthly employment picture from the Bureau of Labor Statistics, released on Friday.
That’s a pullback from January’s big jobs report, when 504,000 revised jobs were added, but it shows the labor market is still radiating plenty of heat.
The unemployment rate rose to 3.6% from 3.4%.
Net job gains in February exceeded economists’ estimates for a smaller month, with just 205,000 added. Separately, downward revisions to the December and January totals were not as large.
While Friday’s report is strong, it’s very bad news in the broader context of the Federal Reserve’s drive to prevent high inflation, said Gus Faucher, chief economist at PNC Financial Services.
“It’s much hotter than the economy can run, so this means the Fed has to keep raising interest rates,” he told CNN. “And that makes a recession more likely.” likely.”
Barring a surprisingly low Consumer Price Index inflation report next week, Faucher said he expects the Fed to go ahead with a half-point rate hike at its March 21-22 meeting. , which would be at a higher pace than the recent, more moderate fourth quarter. increase point.
The Fed has been struggling for nearly a year to slow the economy and crush the highest inflation in 40 years, but the labor market continues to defy those efforts.
“Coming up on the one-year anniversary of the Fed’s rate hike, we never thought we’d see the economy churn out 311,000 more jobs this month,” said Chris Rupkey, chief FwdBonds economist, in a statement. “The party is on and the job market is exploding. It is clear that the economy is not going down, it is going up.”
The monthly job gains remain well above pre-pandemic levels, when about 180,000 jobs were added each month between 2010 and 2019, BLS data show. However, the labor market remains tight and imbalances continue in the efforts to recover from the devastating pandemic.
Labor turnover data released earlier this week for January showed there were 1.9 job openings for every job seeker. Fed Chairman Jerome Powell has often shown how the labor market is still short of pre-pandemic growth projections by more than 3 million people.
The pandemic accelerated expected demographic trends (the aging of the large Baby Boom generation) with more retirements; people also dropped out of the workforce for care-related needs and health concerns such as prolonged Covid; and hundreds of thousands of workers died from Covid.
The February employment report showed a 0.1 percentage point increase in the labor force participation rate to 62.5% – the highest since April 2020. However, it is still below the pre-pandemic levels of 63.4% .
In addition, there was some upward movement in the unemployment rate, which increased by 0.2 percentage points to 3.6%.
“Adding to the upward pressure here, more people were looking for work,” said Mark Hamrick, senior economic analyst at Bankrate.
Industries with notable job benefits included leisure and hospitality, retail trade, government and healthcare. After being crushed during the pandemic, the entertainment and hospitality industry has been regularly rehiring employees and trying to meet increased demand from customers. -consumers shifting their spending from goods to services.
Average hourly earnings — a closely watched metric as the Fed tries to gauge the impact of wage increases on inflation — grew 0.2% month-on-month and rose 4.6% over the a year before.