Construction workers standing in front of the Manhattan skyline and Empire State Building in New York. The Labor Department said the US economy added 311,000 jobs last month, down from a revised figure of 504,000 in January. , photo credit: AFP
The US economy added jobs at a solid clip in February, likely ensuring the Federal Reserve will raise interest rates longer, although wage inflation showed signs of cooling.
Nonfarm payrolls increased by 311,000 jobs last month, the closely watched employment report from the Labor Department showed on Friday. The January data was revised to show 5,04,000 jobs instead of 5,17,000 reported earlier.
Economists polled by Reuters had forecast a job increase of 205,000. He says the economy needs to create 100,000 jobs per month to keep pace with the increase in the working-age population.
Estimates for February payrolls ranged from as low as 78,000 to as high as 325,000 jobs.
The larger than expected increase in payrolls suggested that January’s increase in hiring was not accidental.
Economists had argued that job growth in January was impacted by a number of factors, including unseasonably warm weather, the annual benchmark revision of data as well as overly generous seasonal adjustment factors, with the government trying to remove seasonal fluctuations from the data. The model used for Strong consumer spending growth in January was also partially attributable to seasonal factors.
Average hourly earnings rose 0.2% last month after a 0.3% gain in January. Year-over-year growth in wages rose to 4.6% from 4.4% in January, as last year’s lower reading was left out of the calculation.
Fed Chair Jerome Powell told lawmakers this week that the US central bank will need to raise rates more than expected. Ahead of the jobs report, financial markets had priced in a 50-basis-point rate hike at the Fed’s March 21-22 policy meeting, according to CME Group’s FedWatch tool.
The Fed has increased its policy rate by 450 basis points since last March from the near-zero level to the current 4.50%-4.75% range.
The labor market remains tight, with first-time applications for unemployment benefits remaining very low despite high-profile layoffs in the technology industry.
Data this week showed there were 1.9 job openings for every unemployed person in January, while the Fed’s “Beige Book” report described the labor market in February as remaining “solid”, and that “layoffs Scattered reports” and “finding workers”. Desired skills or experience remained challenging.” Households’ perception of the labor market was also upbeat last month.
The unemployment rate rose to 3.6% in February from 3.4% in January, the lowest since May 1969.
However, some economists caution against placing too much emphasis on the narrow unemployment rate gauge, and instead favor a broader measure of unemployment, which includes people who want to work but have given up searching and They are working part time because they cannot find a job. Full-time employment.
This so-called U-6 unemployment measure stood at 6.6% in January, meaning that 10.9 million people were available to work, more than 10.8 million job openings at the end of January, which would suggest that the labor market is in equilibrium. Was.