US job growth beats expectations in February as economy still hot
March 10, 2023 09:01 PM
The United States added more jobs than expected in February -- though fewer than the previous month, government data showed Friday, suggesting policymakers have more to do to cool down the world's biggest economy
The numbers -- which saw the unemployment rate tick up -- bring slight relief after a surprise hiring surge in January, but also suggest the economy remains hotter than hoped.
The US economy added 311,000 jobs last month, down from a revised 504,000 figure in January, the Labor Department said.
"Notable job gains occurred in leisure and hospitality, retail trade, government, and health care," the department added.
Meanwhile, employment slipped in the information sector and in transportation and warehousing, the report added.
The jobless rate went up slightly to 3.6 percent, from a low last seen in the late 1960s.
Average hourly earnings picked up by 0.2 percent to $33.09 in February. Over the past year, earnings were up 4.6 percent.
The numbers come days after Federal Reserve Chair Jerome Powell warned that the US central bank is prepared to speed up the pace of its interest rate hikes and could lift rates higher than anticipated if needed to rein in stubborn inflation.
"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," he said.
- Potential shift -
The data suggests the jobs market "remains strong with the economy still creating jobs at a rapid pace," said Rubeela Farooqi, chief US economist at High Frequency Economics.
"But a rise in the unemployment rate and softer wage growth suggest a potential adjustment in conditions," she added in a note.
Although indicators suggested the economy was cooling, after eight Fed rate hikes since early last year to lower inflation, data released last month raised fears that the central bank would have to do more in the coming days.
In February, the Fed had announced a smaller interest rate hike than before, fueling optimism that it was approaching the end of its cycle of rate increases.
"A resilient labor market coupled with sticky inflation suggests the Fed will continue to move rates higher over coming meetings," Farooqi said.
The Fed has been closely eyeing the job market, with labor demand exceeding the supply of available workers and companies looking to keep staff they may have struggled to hire during the pandemic.
While unemployment is typically seen to rise as interest rates increase and borrowing costs go up, the jobless rate had hovered at historically low levels in recent months.