US Economy Adds 311K Jobs in February, Unemployment Rate Rises to 3.6%
The U.S. economy added 311,000 new jobs in February, according to the Labor Department’s closely watched monthly employment snapshot, released Friday.[0] The unemployment rate rose to 3.6 percent, above the expectation for 3.4 percent, amid a tick higher in the labor force participation rate to 62.5%, its highest level since March 2020. The Bureau of Labor Statistics' survey of households, used to calculate the unemployment rate, revealed a 177,000 decrease.[1] The unemployment rate, which takes into account discouraged workers and those working part-time due to economic reasons, increased by 0.2 percentage points to 6.8%.
Month-on-month, the average hourly earnings increased by 0.2%, amounting to a year-over-year growth of 4.6%. This metric is closely observed by the Federal Reserve as it seeks to gauge the effect of rising wages on inflation.[2] Of the major industries, leisure and hospitality saw the greatest increase in payrolls, with an additional 105,000 jobs.[3] Two major industries, namely, information and transportation & warehousing, experienced a decrease in February.[4]
Economists from Wall Street anticipate the February employment report to indicate that employers added 220,000 jobs.[5] February's job figures are likely to be lower than January's 517,000, but if there was an unexpected decrease of 100,000, the economy would still have added over 300,000 jobs in the first two months of the year, which is much more than the Federal Reserve expected.[5]
The payrolls report revealed that January saw an addition of 504,000 jobs to the economy, which is 13,000 less than the initially reported amount.[6] Revisions for December decreased the number of gains from 260,000 to 239,000.[7]
After the release, stock performance was varied, whereas Treasury yields mostly decreased.[8]
Toward the conclusion of 2022, with inflation data seeming to decrease, markets anticipated that the Federal Reserve would then reduce the speed of its rate increases.[8] In February, the Federal Open Market Committee gave the go-ahead to a 0.25 percent rise and mentioned that future increases would be much more minor.[8]
Analysts at Commerzbank are bullish on the US labor market and expect another solid jobs report.[9] Upon release, market interest rates decreased and stock futures steadied.[10] Despite a stronger than expected headline print, weaker offsets in the overall report, such as the upturn in the unemployment rate, may keep the Fed from a 50 basis point rate hike on March 22. The decision may come down to next week's CPI report.
0. “The US economy added 311,000 jobs in February, outpacing expectations” CNN, 10 Mar. 2023, https://www.cnn.com/2023/03/10/economy/february-jobs-report-final/index.html
1. “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
2. “Another strong jobs report complicates the inflation outlook” The Boston Globe, 10 Mar. 2023, https://www.bostonglobe.com/2023/03/10/business/another-strong-jobs-report-complicates-inflation-outlook/
3. “Gold price gains as U.S. jobs number beats expectations in February, but unemployment rate climbs” Kitco NEWS, 10 Mar. 2023, https://www.kitco.com/news/2023-03-10/Gold-price-gains-as-U-S-jobs-report-beats-expectations-in-February-but-January-number-revised-down.html
4. “The US added 311,000 jobs in February, unemployment rate at 3.6%” Business Insider, 10 Mar. 2023, https://www.businessinsider.com/job-growth-unemployment-rate-recession-outlook-february-jobs-report-2023-3
5. “Why Friday's Jobs Report Won't Save The S&P 500 From Fed Hawks” Investor's Business Daily, 9 Mar. 2023, https://www.investors.com/news/economy/why-a-soft-jobs-report-wont-save-the-sp-500-from-fed-hawks/
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. “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
8. “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
9. “Nonfarm Payrolls hike by 311,000 in February vs. 205,000 expected” FXStreet, 10 Mar. 2023, https://www.fxstreet.com/news/us-nonfarm-payrolls-forecast-analyzing-february-nfp-release-202303100700
10. “February Jobs Report Beats Expectations: What the Experts Are Saying” Kiplinger's Personal Finance, 10 Mar. 2023, https://www.kiplinger.com/february-jobs-report-interest-rates-unemployment
