The Bureau of Labor Statistics released its monthly jobs report, which continues the recent run of good news for job seekers. The economy gained 311,000 jobs in February, far more than the 205,000 that was expected.
But despite the robust gain in the number of jobs filled, the news is not all good. Any hope that Fed Chairman Jerome Powell would consider a smaller interest rate rise when the board meets in two weeks flew out the window with February’s job numbers. What’s more, the employment gains were not even across the board.
Leisure and hospitality companies gained 105,000 jobs. But employers in manufacturing lost 4,000 jobs. Transportation and warehousing lost about 22,000 jobs. And the information sector, which includes technology companies, cut 25,000 jobs.
New York Times:
The fresh data add to a cacophonous landscape of economic indicators, some of which suggest that businesses and consumers are ramping back up after absorbing the Federal Reserve’s largest interest rate increases in 2022. Others, like the share of workers quitting their jobs, continue to sink back to earth after extraordinary surges over the past three years.
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This batch of information on the state of the labor market will be the last to inform the Federal Reserve before it makes its next interest rate decision in two weeks. It had been expected to stick to a slower course, with increases of one-quarter of a percentage point, but Jerome H. Powell, the Fed chair, warned this week that the outlook could change if new data showed that the economy wasn’t slowing enough to keep inflation in check.
Wage growth slowed to a crawl: 0.2% — the slowest monthly increase since February 2022. Stagnant wages in an inflationary economy aren’t good for the workers. Unemployment actually climbed to 3.6%, which is another indication that the number of jobs is only one part of the overall puzzle. The economy is white hot. and the coming meeting of the Federal Reserve Board’s Open Market Committee could tell the tale of whether we sink into a recession trying to tame inflation by jacking up interest rates or see if the Fed can engineer a soft landing for the economy.
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On this, a good deal of political capital for Joe Biden is riding.
