Employers added 311,000 jobs in February, the Labor Department reported on Friday, creating more jobs than expected.
The unemployment rate rose to 3.6 percent, an exceptionally low level as strong job creation and workers slowly returned to the labor force after the pandemic. It was 3.4 percent in January, the lowest since 1969.
Even as other components lose their steam or lead to higher interest rates, hiring remains a continuing source of dynamism in the economy. But there were signs in the February report that extreme tightening of the job market may be easing.
Boosted the attendance of over 400,000 job seekers Labor force participation rate, the recovery is slow as older people retire early. The proportion of 25- to 54-year-olds in their prime working years rose to 83.1 percent, surpassing its prerecession level.
Wages rose 0.2 percent from January to February, a sustained decline and the smallest increase since February 2022. That should provide some comfort to Federal Reserve policymakers, who have been closely watching earnings as a driver of inflation.
Employment gains were again led by industries such as leisure and hospitality, which added 105,000 jobs, but were 2.4 percent below the level three years ago.
“Some of these sectors, especially services, are still recovering from the pandemic,” said Eugenio Aleman, chief economist at financial services firm Raymond James. “I think that puts the idea of ​​a recession into doubt.”
Construction, which grew steadily even as the housing market entered a deep recession, continued to add jobs, as did health care, retail, and professional and business services.
However, other sectors have clearly lost momentum. The information industry, which includes many large technology companies, has shed 25,000 jobs in Silicon Valley due to layoffs. Goods-related industries – including manufacturing, transportation and warehousing – were negative as retailers burned through their bloated inventories, reducing demand for new orders and people moving goods.
Defying some expectations, the blockbuster January job gains were only marginally revised, remaining at a – for now – very strong 504,000.
A new batch of data adds to a cacophonous landscape of economic indicators that show some businesses and consumers are rebounding after absorbing the Federal Reserve’s biggest interest rate hike in 2022. Others etc Share of workers leaving jobsAfter extraordinary upheavals in the past three years, it continues to sink back into the earth.
Another big data point comes on Tuesday with the consumer price index reading for February. There was a 6.4 percent year-on-year increase in January.
The central bank was expected to maintain a slower pace of interest rate hikes, moving in about a quarter of a percentage point increment. But Federal Reserve Chairman Jerome H. Powell warned this week that if new data show the economy is not slowing enough to keep inflation under control, policymakers could opt for more hikes at a meeting on March 21-22.
“The big effect is that it slightly reduces the chances of a slowdown,” said Brad Hershbein, senior economist at the WE Upjohn Institute for Employment Research, referring to the ability to contain inflation without bringing about a recession. “The broader pattern is still consistent with a gradual cooling of the labor market, but more gradually than the Fed would like.”
To date, employers have been very reluctant to lay off workers, even as business in some industries has faded due to severe labor shortages in some sectors. This has allowed overall employment to expand even as the hiring pace — the rate at which employers add new workers — has slowed significantly.
But that tolerance will be thin if the central bank succeeds in curbing demand for services like restaurants and airlines, where millions of unfilled jobs continue to fuel strong wage growth and consumers show no sign of backing down.
