US Economy Adds 311,000 Jobs in February, Unemployment Rate Rises to 3.6%, Fed Poised for Rate Hike
The U.S. economy added 311,000 jobs in February, according to the Labor Department's closely watched monthly employment snapshot released Friday. The figure was well above projections of 205,000, and compared with a downwardly-revised gain of 504,000 in January. January's unemployment rate increased slightly to 3.6%, from its 53-year low of 3.4%, with the number of unemployed individuals remaining nearly the same at 5.9 million. The labor force participation rate, which measures the share of the labor force either employed or looking for work, edged up to 62.5%.
Employment gains in the leisure and hospitality sector increased by 105,000, which is roughly in keeping with the average of 91,000 for the last six months. Retail experienced an increase of 50,000 There was an increase of 45,000 in professional and business services, and the government added 46,000. Within the information sector and transportation and warehousing industries, there have been reported job losses.
Average hourly wages rose by 0.2% in February, up to $33.09, below the average 0.3% estimate and below 0.3% in January. Average hourly earnings on a year-on-year basis, a critical element of the report used to anticipate potential inflation, increased by 4.6% last month, slightly below the predicted figure of 4.7%. The monthly increase was 0.2%, which was lower than the expected 0.4%.
The job gains surpassing expectations could lead the Fed to take more drastic measures when it comes to rate adjustments at the upcoming policy meeting. CME Group's fed funds futures data suggests that markets predict a nearly 50% chance of the Federal Reserve increasing interest rates by 50 basis points at the March 21-22 FOMC meeting. It is expected that the final fed funds rate will be between 5.25% and 5.5% by the end of July The unemployment rate increased to 3.6%, surpassing the anticipated 3.4%.
Rates have decreased and a 50 basis point rate increase is possible, however, these are not directly connected to the job report; rather, they are due to worries regarding Silicon Valley Bank and other banks who may be going through similar predicaments. Despite the market's fluctuation, the Federal Reserve is unlikely to deviate from its course of rate increases in light of the strong labor market and elevated inflation levels.
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