WASHINGTON—In what was the best month for job growth since July of 2021, the U.S. economy added 678,000 jobs in February, exceeding the expectations of most economists.
According to the new data from the Bureau of Labor Statistics, the U.S. now needs to add 2.1 million jobs in order to return to the level of employment in 2020, before the pandemic-related lockdowns were put in place.
Once again it was the leisure and hospitality sector, which was hit hardest by Covid-related layoffs, that added the most jobs back, at 179,000. Most of these jobs were created at restaurants and bars as Americans continue socialize again.
“The labor market added more jobs in February than expected, building on its strong performance from previous months,” CUNA Senior Economist Dr. Dawit Kebede. “The unemployment rate dropped to 3.8%, approaching a pre-pandemic level of 3.5%. The employment gains are widespread across many sectors with leisure and hospitality on top as COVID-19 cases decline.
“Labor force participation increased a little but remains lower than its pre-pandemic level, which makes it difficult for businesses that are in need of workers. However, hourly wages remain almost the same after continuous increases in recent months.
“Federal Reserve Chair Jerome Powell indicated that he will suggest a quarter basis point interest rate increase in March to control rising prices. This employment report provides the Federal Research strong support for such a measure,” added Kebede.
NAFCU Analysis
Added NAFCU Chief Economist and Vice President of Research Curt Long, "The February jobs report eclipsed expectations as the impact of the Omicron variant fades. The labor force participation rate improved from the prior month, as 600,000 fewer workers reported being out of the labor force due to the pandemic. Average hourly wage growth slowed in February, but that is likely the result of compositional effects due to strong hiring in low-wage sectors. There is plenty of uncertainty due to the war in Ukraine, but the path is clear for the FOMC to initiate liftoff later this month."