The US added 311,000 jobs in February, again beating estimates, but still representing fewer jobs than were added in January.
Dow Jones estimated that 225,000 hires would be made last month.
The unemployment rate dropped from 3.4 percent to 3.6 percent, which remains historically low, as the country recovers from the COVID-19 pandemic that rocked the economy three years ago this month.
The government report on Friday made it clear that the nation’s job market remains fundamentally healthy, with many employers still eager to hire.
Fed Chairman Jerome Powell told Congress this week that the Fed would likely increase its rate hikes if signs continued to point to a robust economy and persistently high inflation.
The US added 311,000 jobs in February, again beating estimates, but still accounting for fewer jobs than were added in January.
President Joe Biden talks about what’s in his budget Thursday in Philadelphia
A strong labor market typically leads companies to raise wages and then pass their higher labor costs on to customers through higher prices.
Last month, the government reported a surprising increase in hiring for January – 517,000 added jobs – although that gain was revised down slightly to 504,000 in Friday’s report.
Consumers also increased their spending in January, suggesting that the economy had strengthened earlier in the year.
The Fed’s preferred inflation gauge also accelerated.
With February’s sizable job growth following January’s expansionary gain, the Fed may accelerate its rate hikes to combat inflation.
When the Federal Reserve tightens credit, it typically leads to higher rates on mortgages, car loans, credit card loans, and many business loans.
What the Fed may decide to do about interest rates when it meets later this month remains uncertain.
The decision will be based, in part, on his assessment of Friday’s jobs data and next week’s report on consumer inflation in February.
Last month, the government report on inflation for january it had set off alarm bells by showing that consumer prices had accelerated again month by month.
The robust job growth for January, reported early last month, was the first in a series of reports pointing to an accelerating economy early in the year.
sales in retail stores and restaurants also jumped, and inflation, by the Fed’s preferred measure, rose from December to January to fastest pace in seven months.
The strongest data invested a cautiously optimistic narrative that the economy was cooling modestly, enough, perhaps, to control inflation without triggering a deep recession.
Now, the economic picture is more confusing.
High debt rates have caused craters in the housing market, and home sales have fell for 12 months straightconsequence of the fact that the average mortgage rate almost doubled during that time.
Manufacturing is also showing signs of weakness. Higher rates have made it harder for businesses and consumers to borrow to buy major factory goods, from machinery to cars and appliances.
By contrast, spending on services, such as travel, dining out, and attending entertainment events, remains strong.
Many Americans continue to engage in activities that were restricted during the COVID shutdowns.
Hiring at the February rate is about triple the level the Fed would prefer.
Job gains of around 100,000 per month would be enough to keep up with population growth and prevent unemployment from rising.
Such a low figure would also mean employers weren’t as desperate for workers and wouldn’t have to keep raising wages.
A higher salary is great for employees, of course.
But Fed officials say it is contributing to higher inflation, particularly in labor-intensive service industries such as restaurants, health care and hotels.