WASHINGTON–The U.S. economy added 311,000 jobs in February, according to the Labor Department's monthly employment snapshot, released this morning.
That figure is below the unexpectedly large revised 504,000 positions were added in January, but continues to show the jobs market remains hot.
The unemployment rate ticked up to 3.6% from 3.4% in the new data.
The January figure again exceeded what many economists had been predicted, with predictions that approximately 205,000 jobs would be created.
“The February employment report was a positive one overall,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Although the unemployment rate rose, job gains were strong and labor force participation grew signaling Main Street’s optimism in hiring. The bigger news was the lowest month-over-month gain in average hourly wages in a year. That result, paired with a downtick in average hours worked, throws some doubt into the FOMC’s March decision. Although a 50-basis point hike is still on the table, this report is more supportive of a quarter-point increase."
Opening the Door for Rate Increase
"The increase in average hourly earnings decreased to an annualized rate of 2.4%. This shows that the expected inflationary pressure from wage increases is low despite tight labor market conditions," said CUNA Senior Economist Dawit Kebede. “The job market continues to be strong despite tight monetary policy which is expected to slow hiring. Federal Reserve chair Jerome Powell, in his testimony to congress this week, said that it is prepared to increase the pace of rate hikes if warranted by economic data. Data on employment, consumer spending, and inflation so far this year are higher than anticipated. This opens the door for higher rate increase than initially expected.”
The Gainers
The federal data show the industries with notable job gains included leisure and hospitality, retail trade, government and health care.
Meanwhile, average hourly earnings — a closely watched metric as the Federal Reserve seeks to evaluate the impact of rising wages on inflation — grew 0.2% month-on-month and were up 4.6% over the year before.
The labor force participation rate increased to 62.5% from 62.4%.