Jobs Reports Shows 311,000 Added Jobs, Exceeding Predictions

The Monthly Employment Situation, released this morning by the Bureau of Labor Statistics, showed an increase of 311,000 jobs in February. Prevailing strength spells trouble for the Federal Reserve as the labor market shows its resiliency against interest rate hikes. On Wednesday, the ADP Research Institute released its National Employment Report which showed an addition of 242,000 private payrolls last month, stating “Job gains are solid and wage growth remains elevated.” According to Nela Richardson, Chief Economist at ADP, “…pay growth remains quite elevated. The modest slowdown in pay increase, on its own, is unlikely to drive down inflation rapidly in the near-term.”

Last month’s report packed a hearty punch when it reported 517,000 added jobs in January, but that appears to be an anomaly after today’s release. Numbers from the January report have been revised down to 504,000.  February numbers are certainly much lower, but the market is still showing higher than expected gains, meaning it is strong despite all efforts to cool the economy and reduce inflation. The Fed’s next rate decision is scheduled for March 14th and today’s report is likely to spur more interest rate hikes. Inflation remains top of mind for many Americans, and soon unemployment could be a factor as well. The unemployment rate was reported at 3.60% this morning, edging up slightly from January’s report.  More rate hikes could have a secondary effect: higher unemployment.

According to the Consumer Confidence Survey, updated on February 28th, the Consumer Confidence Index decreased again for the second month from 106.0 to 102.9. The Expectations Index, also a part of the Consumer Confidence Survey, fell even further from the low of 76.0 in January to 69.7 in February. It has been below to threshold of 80, a telltale signal of a looming recession, for the past 11 months.

Leisure and hospitality led job gains with 105,000 added jobs in February, with food services and drinking places increasing by 70,000 jobs, and accommodation adding 14,000. Employment in retail trade increased by 50,000, government employment rose by 46,000, and professional and business services continued an upward trend by adding 45,000 jobs. Health care added 44,000 jobs, construction added 24,000 jobs, and employment in social assistance added 19,000. The information industry fell by 25,000 jobs adding up to 54,000 jobs lost since November. The average hourly earnings for nonfarm payrolls increased by 8 cents.


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