US Economy Adds 311K Jobs in February, Unemployment Rate Ticks Up
On Friday, the Labor Department reported that the U.S. economy had gained 311,000 jobs in February, maintaining the current vigorous pace of hiring which has been a major contributor to the nation's closely-balanced labor market.[0] This reading came in much higher than the market expectation of 205,000, but represented a deceleration from the unusually strong January number of 504,000.[1] The unemployment rate ticked up to 3.6% from 3.4%, surprising market consensus that expected the rate to remain the same.[2]
Leisure and hospitality led the way in payroll gains among major industries, with job growth of 105,000, while retail saw a gain of 50,000 and government added 46,000.[3] Average hourly earnings year-on-year increased by 4.6% in the last month, marginally lower than the estimated 4.7% anticipated by the market. This statistic is an important indicator of future inflation.[4]
An analysis done by the Associated Builders and Contractors of the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey revealed 248,000 job openings in the construction industry for the month of January.[5] This number was a sharp drop from the 488,000 openings in the previous month and 148,000 from the same time last year.
In his testimony before Congress this week, Federal Reserve Chairman Jerome Powell indicated that officials may need to raise rates higher than previously projected in the face of hotter-than-expected economic data.[6] He noted the “extremely tight” labor market as a reason why rates are likely to continue rising and stay elevated.[7]
Friday brings the February jobs report into the spotlight, and economists are anticipating a dip from January's figures. Investors are eager to examine the data and determine the implications it may have on Federal Reserve's decision concerning interest rates.[8] Markets priced in less of a chance that the central bank will accelerate to a 0.5 percentage point increase, dropping the likelihood to 48.4%, or about a coin flip, according to a CME Group estimate.[7] This tale is unfolding and will be revised.[9]
0. “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
1. “Nonfarm Payrolls rise 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
2. “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
3. “US hiring boom continued in February with 311,000 added jobs” The Guardian, 10 Mar. 2023, https://www.theguardian.com/business/2023/mar/10/us-jobs-report-february-2023
4. “Jobs report: US economy adds 311,000 jobs in February as labor market stays strong” Yahoo Money, 10 Mar. 2023, https://money.yahoo.com/february-jobs-report-march-10-2023-124602371.html
5. “ABC: Construction Job Openings Plummet by a Shocking 240,000 in January | News Releases” Associated Builders and Contractors, 8 Mar. 2023, https://www.abc.org/News-Media/News-Releases/entryid/19847/abc-construction-job-openings-plummet-by-a-shocking-240000-in-january
6. “Economy again beats expectations with 311000 jobs in February, unemployment rises to 3.6%” Washington Examiner, 10 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/economy-again-beats-expectations-with-311-000-jobs-in-february-unemployment-rises-to-3-6
7. “Payrolls rose 311,000 in February, more than expected, as jobs growth stays hot” CNBC, 10 Mar. 2023, https://www.cnbc.com/2023/03/10/jobs-report-february-2023.html
8. “Friday's Jobs Report Is In. What It Means for the Fed.” Barron's, 10 Mar. 2023, https://www.barrons.com/articles/february-jobs-report-today-39762ac
9. “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
