The US economy added 311,000 jobs in February, surpassing expectations and signaling a continued hot growth trend.[0] However, the unemployment rate rose to 3.6%, above the expectation for 3.4%, amid a tick higher in the labor force participation rate to 62.5%, its highest level since March 2020.[1] Average hourly earnings grew 0.2% month-on-month and were up 4.6% over the year before, however the monthly increase of 0.2% was below the 0.4% estimate.[2]
Leisure and hospitality led employment gains with an increase of 105,000, about in line with the six-month average of 91,000.[3] Retail saw a gain of 50,000, government added 46,000, and professional and business services saw an increase of 45,000.[4] The month saw a decrease of 25,000 jobs in the information sector, as well as a loss of 22,000 jobs in transportation and warehousing.[5]
The monthly job gains come on the heels of a surprisingly strong January jobs report in which 504,000 jobs were added to the economy.[6] The average workweek ticked down to 34.5 hours from a revised 34.6 hours, signaling a “significant overall drop” in labor demand.[2] This more aggressive rate hike was a modification of their former policy to slow the pace of rate hikes which was evident in the fact that after four consecutive rate hikes of ¾% last year in December the Fed reduced the magnitude of each rate hike just slightly to ½%.[7]
The report shows the Fed is likely to continue to quickly raise interest rates, which will not be happy news for any consumer who is trying to borrow money soon.[8] On March 22, the Federal Reserve’s Open Market Committee will announce its next move on interest rates.[8] Powell informed the Senate Banking Committee this week that the Federal Reserve is ready to step up the rate of hikes, depending on how strong the job market is.[9] Those trying to obtain a mortgage, automobile loan, or other forms of borrowing will continue to feel the negative impact of additional interest rate increases.[9]
Overall, the labor market remains tight, with job creation decelerating in February but still stronger than expected despite Federal Reserve efforts to slow the economy and bring down inflation.[1] Though wage growth has slowed with an annualized rate of 3.6%, this rate is still in line with the 3.5% wage growth Fed chair Jerome Powell has said is consistent with the 2% inflation target.[2]
0. “U.S. economy adds 311000 jobs in February despite unemployment rate jump” CBS News, 11 Mar. 2023, https://www.cbsnews.com/video/u-s-economy-adds-311000-jobs-in-february-despite-unemployment-rate-jump/
1. “US economy added 311,000 jobs in February, exceeding expectations” NBC News, 10 Mar. 2023, https://www.nbcnews.com/business/business-news/payrolls-rose-311000-february-expected-jobs-growth-stays-hot-rcna74329
2. “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/
3. “Jobs report: US economy adds 311,000 jobs in February as labor market stays strong” Yahoo News, 10 Mar. 2023, https://news.yahoo.com/february-jobs-report-march-10-2023-124602371.html
4. “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
5. “Takeaways from the February jobs report” CNN, 11 Mar. 2023, https://www.cnn.com/2023/03/11/economy/february-jobs-report-takeaways/index.html
6. “The job market slowed last month, but it’s still too hot to ease inflation fears” NPR, 10 Mar. 2023, https://www.npr.org/2023/03/10/1162054252/jobs-workers-labor-market-inflation-federal-reserve
7. “The jobs report revealed an unexpected outcome, but it’s not what you think” Kitco NEWS, 10 Mar. 2023, https://www.kitco.com/commentaries/2023-03-10/The-jobs-report-revealed-an-unexpected-outcome-but-it-s-not-what-you-think.html
8. “February’s Jobs Report Brings More Confusing Economic News” TIME, 10 Mar. 2023, https://time.com/6261754/february-jobs-report
9. “Lopsided job-to-worker ratio continues; Michigan talent agency blames mismatched expectations” MLive.com, 10 Mar. 2023, https://www.mlive.com/public-interest/2023/03/lopsided-job-to-worker-ratio-continues-michigan-talent-agency-says-its-a-mismatch-of-expectations.html