The US economy added 311,000 jobs in February, according to the Labor Department’s monthly employment snapshot released Friday, surpassing expectations.[0] The unemployment rate rose to 3.6%, above the expectation for 3.4%, while the labor force participation rate ticked up to 62.5%, its highest level since March 2020.[1] Of the new positions added, leisure and hospitality had the largest gain of 105,000, followed by retail with an increase of 50,000 and government jobs with 46,000. Average hourly wages rose by 0.2% in February, up to $33.09, falling below expectations.
The leisure and hospitality sector saw an increase of 105,000 jobs in February, with food services and drinking places specifically seeing a rise of 70,000 jobs. The leisure and hospitality sector still has 410,000 fewer jobs than it did in February 2020, prior to the start of the pandemic, which translates to a 2.4% decrease.[2] Financial activities added 62,000 jobs, while manufacturing showed a robust 43,000 gain as the industry benefited from a mild winter.[3]
Hourly wages increased by 0.2% in February, equating to a 4.6% annual increase, which was less than anticipated. Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, noted a “significant overall drop” in labor demand when the average workweek decreased to 34.5 hours from a revised 34.6 hours.[4]
On March 22, the Federal Reserve’s Open Market Committee will announce its next ruling on interest rates.[5] At his Congressional testimony on March 7, Federal Reserve Chair Jerome Powell indicated that, based on the robustness of recent economic figures, the eventual level of interest rates is anticipated to be higher than originally thought.[5] The current year-over-year wage growth is consistent with an inflation rate of 3.0% to 3.5%, which is above the Fed’s 2.0% target, but less alarming than what we’ve seen over the past year.[4]
In Canada, the economy added 21,800 jobs in February, and the unemployment rate was unchanged at 5 per cent.[6] In February, 22,000 jobs were created throughout Canada, and the average wage increased by 5.4% ($1.69) to $33.16 compared to February of the previous year.[7] The information sector recorded a notable decrease in job numbers, having lost an additional 25,000 (-0.[8]
0. “February jobs report: U.S. economy added 311,000 jobs” Axios, 10 Mar. 2023, https://www.axios.com/2023/03/10/us-february-jobs-report-2023
1. “After the US added 300,000 jobs in February, the Fed will likely raise rates faster” Yahoo Entertainment, 10 Mar. 2023, https://www.yahoo.com/entertainment/us-added-300-000-jobs-135000785.html
2. “Strong February Jobs Report Leaves Fed on Track for More Rate Hikes” Morningstar, 10 Mar. 2023, https://www.morningstar.com/articles/1143511/strong-february-jobs-report-leaves-fed-on-track-for-more-rate-hikes
3. “Private payrolls rose by 242,000 in February, better than expected, ADP says” CNBC, 8 Mar. 2023, https://www.cnbc.com/2023/03/08/adp-jobs-report-february-2023-.html
4. “Jobs Report: Soft Wage Growth Offsets Strong Hiring” Investor’s Business Daily, 10 Mar. 2023, https://www.investors.com/news/economy/jobs-report-soft-wage-growth-offsets-strong-hiring-sp-500-futures-rise/
5. “February’s Jobs Report Brings More Confusing Economic News” TIME, 10 Mar. 2023, https://time.com/6261754/february-jobs-report
6. “Canada Labor Market: Jobs Gain Doubles Expectations, Testing Interest Rate Pause” Bloomberg, 10 Mar. 2023, https://www.bloomberg.com/news/articles/2023-03-10/canada-s-jobs-market-doubles-expectations-testing-rate-pause
7. “Windsor area’s unemployment rate continues to plunge” Windsor Star, 10 Mar. 2023, https://windsorstar.com/news/local-news/windsor-areas-unemployment-rate-continues-to-plunge
8. “Payrolls rose 311,000 in February, more than expected, showing solid growth” CNBC, 10 Mar. 2023, https://www.cnbc.com/2023/03/10/jobs-report-february-2023.html