U.S. Added 311,000 Jobs in February as Hiring Remained Strong
CBS News - March 24, 2023 7:07 am
Employers across the U.S. added 311,000 jobs in February, a sign the labor market remains solid even as the Federal Reserve tries to slow economic growth.
The figure, released by the Department of Labor, was higher than economists’ expectations that employers had added about 208,000 jobs last month, according to financial data company FactSet. The jobless rate edged up to 3.6%, from 3.4% in the prior month as more Americans looked for work.
Hiring was strong among employers in the leisure and hospitality, retail and health care industries, as well as for government jobs, the Labor Department said. The U.S. has an ongoing “scarce talent market” that is prompting employers to hire, noted Becky Frankiewicz, president of the recruiting company Manpower Group.
The “overall picture is one of job growth that remains well above the economy’s long-term potential and is much too hot for the Federal Reserve,” wrote PNC chief economist Gus Faucher in a report.
The latest payroll numbers mark a decline from January’s unexpectedly strong hiring, when employers added 517,000 jobs, or more than twice the number that economists had expected.
The stronger-than-expected job growth underscores the battle ahead for the Fed, which over the past year has sharply raised interest rates in an effort to put the brakes on the economy. The tight job market and strong hiring may heighten the risk that high inflation could persist, spurring policy makers to speed up rate hikes.
As a result of February’s jobs data, the central bank is likely to raise the federal funds rate by half a percentage point when it meets in two weeks, higher than the earlier expectation from economists that the Fed would raise rates by a quarter point, Faucher noted.
More Americans are searching for work, helping to expand the labor market. About 419,000 people joined the job market in February compared with January, according to Faucher.
That helped lift the labor force participation rate — the share of working-age adults who are working or looking for a job — to the highest rate since the pandemic, at 62.5%. Still, participation remains lower than its pre-pandemic level of 63.3% as many adults remained sidelined by health issues, child care or other issues.
The average hiring rate of the past three months is 351,000, not far off the 400,000 three-month average recorded in 2022, noted Brian Coulton, chief economist of Fitch.
“If job growth stays at this pace, labor market imbalances are not going to ease,” Coulton noted.