US Adds 275,000 Jobs in February Amidst Growing Labor Market
By Lauren Aratani in New York, Fri 8 Mar 2024 16.41 CET
Employers in the United States expanded their payrolls by 275,000 jobs in February, demonstrating continued growth in the labor market despite challenges posed by high interest rates.
The job growth surpassed Wall Street's expectations of 200,000 new jobs, marking an increase from the revised figure of 229,000 jobs added in the previous month.
According to data released by the Bureau of Labor Statistics (BLS) on Friday, the unemployment rate rose to 3.9%, a 0.2% increase compared to January. However, this rate still maintains a remarkable streak, with unemployment staying below 4% for 25 consecutive months, the longest stretch since the 1960s.
Several sectors experienced notable job gains, including healthcare, government employment, and food services and drinking establishments.
While job creation persists on a monthly basis, there has been a noticeable cooling in labor market activity. Revised figures show a decrease in employment for December and January, with December's employment figure lowered by 43,000 and January's by 124,000.
Additionally, recent official data indicated a slight decline in both job openings and the number of workers voluntarily quitting their jobs in January. However, the number of resignations remains at its lowest since January 2021.
Conversely, layoffs have surged significantly, reaching the highest level for any February since 2009, according to Challenger, Gray & Christmas, an outplacement firm. Layoffs in February totaled 84,658, representing a 3% increase from the previous month and a 9% increase from the same period last year.
Despite the rise in layoffs, job growth has remained robust, with private sector payrolls expanding by 140,000 jobs last month, according to a report from ADP, a payrolls firm.
Nela Richardson, chief economist at ADP, noted that "job gains remain solid" and emphasized that pay increases, while trending lower, still outpace inflation. She also indicated that the dynamic nature of the labor market does not significantly influence the Federal Reserve's interest rate decisions for the year.
Economists have been closely monitoring job and inflation data as the Federal Reserve aims for a "soft landing," seeking to stabilize price growth and prevent a recession. The Fed's efforts to combat inflation, which peaked at 9% in June 2022 and has since declined to 3.1% in January, involved raising interest rates 11 times to levels not seen in over two decades.
Federal Reserve Chair Jerome Powell stated that the central bank is seeking consistent, rather than improved, inflation readings. Powell also suggested that interest rates will likely remain unchanged until at least the summer, dismissing speculation of rate cuts in the near future and asserting that the US economy is not at immediate risk of recession.
President Joe Biden hailed the robust job figures, asserting that the American economy stands as the strongest globally. In his recent State of the Union address, Biden reiterated his commitment to ensuring a soft landing for the economy and emphasized the resilience of the American people amidst challenging times.
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Treasury Secretary Janet Yellen echoed Biden's sentiments, stating in an interview with CNN's Kate Bolduan that the February jobs report reflects a resilient US economy and does not signal any concerning implications for inflation. Yellen highlighted the absence of evidence in wage data indicating an acceleration in inflationary pressures, affirming the nation's economic performance as superior to that of other advanced economies.
Yellen further promoted President Biden's initiatives to enhance affordability in the housing market, emphasizing proposals aimed at addressing high mortgage rates, elevated home prices, and housing shortages. These initiatives include tax credits and legislation aimed at constructing and renovating over 2 million homes to alleviate the housing supply gap and reduce housing costs, pending congressional action.
Yellen underscored the significance of these proposals in prioritizing the well-being of middle-class families, ensuring their ability to afford a decent standard of living and receive assistance with major financial burdens.
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Wage data Labor market President Joe Biden Housing market Mortgage rates Home prices
Housing supply Tax credits Legislation Middle-class families Inflation
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