The U.S. economy added a larger-than-expected 275,000 new jobs in February as the labor market continues to defy economists’ expectations of a slowing market.
According to the Bureau of Labor Statistics (BLS), the unemployment rate rose to 3.9 percent last month, up from 3.7 percent in January. This was higher than market forecasts of 3.7 percent.
Average hourly earnings rose 0.1 percent monthly, below the consensus estimate of 0.3 percent. On a year-over-year basis, average hourly earnings eased to 4.3 percent.
The labor force participation rate was unchanged at 62.5 percent, while average weekly hours increased to 34.3 from 34.2.
Health care and the government were the top job creators last month, adding 67,000 and 52,000 new jobs, respectively. This was followed by food services and drinking places (42,000), social assistance (24,000), and construction (23,000).
Manufacturing lost 4,000 positions.
The number of people working multiple jobs was little changed at 8.259 million. People employed part-time for economic reasons was flat at 4.4 million. The number of individuals not in the labor force who want a job little changed at 5.7 million.
There was further divergence between full- and part-time employment.
Full-time workers fell by 187,000, while part-time workers rose by 51,000.
Once again, revisions were a major facet of the February jobs report.
In January, the federal agency initially reported that the economy added 353,000 positions. The BLS later revised it to 229,000, a decrease of 124,000. This means in 10 of the last 12 months, there have been downward revisions.
Average hourly earnings were adjusted down from 0.6 percent to 0.5 percent monthly. They were also changed lower from 4.5 percent to 4.4 percent year-over-year.
Market Reaction
The financial markets were relatively flat before the opening bell following the latest labor data.
U.S. Treasury yields remained in the red across the board, with the benchmark 10-year yield sliding toward 4.04 percent.
Analysts believe that the recent employment figures will allow the Federal Reserve to stay on its tightening path without veering of course.
“Job creation is strong, and unemployment is barely budging from the lows,” said Giuseppe Sette, the president of investment research firm Toggle AI. “All in all, this employment report will push the Fed to keep its course and leave rates unchanged: this is not an economy in need of a rate cut. CPI [consumer price index] in four days might confirm this view, or provide more nuance.”
Bryce Doty, the senior vice president and senior portfolio manager at Sit Fixed Income Advisors, conceded that the labor numbers were “not as good as it seems.”
“While jobs were higher than expected, so were the large revisions downward for the prior two months,” Mr. Doty said in a note. “The rising unemployment rate also indicates some underlying weakening in the labor market. It appears that net of the revisions, more people lost their jobs than the number of people who got jobs.”
A Flurry of Labor Data
The Bureau of Labor Statistics (BLS) published the results of its Job Openings and Labor Turnover Survey (JOLTS) on March 6. The report found that the number of employment vacancies slipped by 26,000 from a downwardly revised 8.89 million.
Job quits fell by 54,000 to 3.385 million, the lowest level since January 2021.
Payroll processor ADP announced its National Employment Report that private-sector companies added 140,000 positions last month, slightly below the consensus estimate of 150,000. This was up from 111,000 in January.
Additionally, pay gains for job changers surged for the first time in a year, rising from 7.2 percent to 7.6 percent. Job-stayers rose more than 5 percent.
“Job gains remain solid. Pay gains are trending lower but are still above inflation,” said Nela Richardson, the chief economist at ADP. “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.
Layoffs were rampant in February. According to Challenger figures, U.S.-based employers announced 84,638 job cuts, up slightly from 82,307 in the previous month and the highest in 11 months. Moreover, this was the largest number of layoffs for February since 2009.
The layoffs were concentrated in transportation (13,573), tech (12,412), services (8,686), and education (6,102).
“As we navigate the start of 2024, we’re witnessing a persistent wave of layoffs. Businesses are aggressively slashing costs and embracing technological innovations, actions that are significantly reshaping staffing needs,” stated Andrew Challenger, the senior vice president of Challenger, Gray & Christmas.
Department of Labor data reveal that continuing jobless claims, the total number of individuals receiving unemployment benefits, rose to a four-month high of 1.906 million for the week ending Feb. 24.
Recent findings from RedBalloon’s Freedom Economy Index for February showed that many small business employees work two or more jobs. Employers reported that 30 percent or more of their workforce works second and third jobs.
“A robust job musical-chairs” persist as 40 percent of employers said workers are job-hopping. Eleven percent say conditions have stabilized.
For small businesses, crime remains a vital issue, as 70 percent say it has “significantly or slightly increased.” A little more than a quarter (26 percent) report crime neither increasing nor decreasing.
In the study conducted ahead of President Joe Biden’s State of the Union address, 46 percent of small business owners noted that border security is the most important issue for him to discuss.
From The Epoch Times
