Thursday, April 25

US adds 275,000 jobs in February as growth remains strong: live updates

If the economy is slowing down, no one has informed the labor market.

Employers added 275,000 jobs in February, the Labor Department reported Friday, in another month that beat expectations.

It’s the third straight month of gains above 200,000 and the 38th straight month of growth — further evidence that after emerging from pandemic-related shutdowns, America’s jobs engine still has plenty of momentum.

“We were expecting a slowdown in the labor market and more easing of conditions, but we’re just not seeing it,” said Rubeela Farooqi, chief economist at High Frequency Economics.

The previous two months, December and January, were revised down by a total of 167,000 jobs, reflecting the higher degree of statistical volatility during the winter months. This does not disrupt the picture of robust and consistent increases, which now appears slightly smoother.

At the same time, the unemployment rate, based on a household survey, rose to a two-year high at 3.9 percent, up from 3.7 percent in January. A broader measure of labor market slowdown, which includes people working part time who would prefer to work full time, is steadily increasing and now stands at 7.3 percent.

The unemployment rate was fueled by people losing or leaving their jobs as well as those entering the labor market to look for work. The labor force participation rate of people in their prime working years – ages 25 to 54 – jumped to 83.5 percent, matching a level last year that was the highest since the beginning of the 2000s.

The average hourly wage increased 4.3 percent over the year, although the pace of increases has eased.

“We’ve seen increases in real wages recently, which has encouraged people to re-enter the job market, and that’s a good development for workers,” said Kory Kantenga, senior economist at the job search site LinkedIn. As wage growth slows, he says, the likelihood that more people will start looking for work decreases.

As recently as last fall, economists were forecasting much more modest employment increases, with hiring concentrated in a few sectors. But even as some pandemic-swollen industries have shed jobs, expected slowdowns in sectors like construction have not materialized. Rising wages, attractive benefits and more flexible working hours have put millions of workers out of work.

High levels of immigration have also increased labor supply. According to a Brookings Institution analysisThis influx almost doubled the number of jobs the economy could create each month in 2024 without putting upward pressure on inflation, to between 160,000 and 200,000.

Health care and government once again led payroll increases in February, while construction continued its steady rise. Retail trade, transportation and warehousing, which were stable or negative in recent months, have recovered.

No major industry lost substantial numbers of jobs. Credit intermediation continued to decline: this sector, which mainly includes commercial banks, has lost around 123,000 jobs since the start of 2021.

This is not to say that the employment landscape looks rosy for everyone. Employee trust, such as measured by business rating site Glassdoor, is in steady decline as layoffs at tech and media companies dominate headlines. This is especially true in white-collar professions like human resources and consulting, while those in professions that require working in person — like health care, construction and manufacturing — are more optimistic.

“It’s a two-tier labor market,” said Aaron Terrazas, Glassdoor’s chief economist, noting that job searches take longer for people with a higher education diploma. “For skilled workers in high-risk industries, anyone laid off has difficulty finding new employment, whereas if you are a blue-collar or front-line service worker, the situation remains competitive.”

The last few months have been marked by strong economic data, which has led to analysts interviewed by the National Association for Business Economics to raise their gross domestic product forecasts and lower their expectations for the trajectory of unemployment. This happened even as inflation eased, leading the Federal Reserve to telegraph plans to cut interest rates later this year, further raising growth expectations.

Mervin Jebaraj, director of the University of Arkansas Center for Business and Economic Research, helped compile the survey responses. He said the mood was partly buoyed by waning concern over federal government shutdowns and draconian budget cuts, after several close clashes since the fall. And he sees no obvious reason why the recovery will stop soon.

“Once it starts, it continues,” Mr. Jebaraj said. “There was this external stimulus with all the billions of dollars in government spending, now it’s sort of self-sustaining, even though the money is gone.”