Unemployment in the United States fell slightly to 3.8% in February before the Fed’s rate hike

(Xinhua) 08:29, 05 March 2022

People dine at a restaurant in New York, the United States, Sept. 30, 2020. (Photo by Michael Nagle/Xinhua)

Job growth was broad-based, led by gains in leisure and hospitality, professional and business services, healthcare and construction, according to a report.

WASHINGTON, March 4 (Xinhua) — U.S. employers added 678,000 jobs in February as the Omicron-fueled COVID-19 surge wanes, with the unemployment rate dropping slightly to 3.8 percent, the department reported Friday. American Labor.

Job growth was broad-based, led by gains in recreation and hospitality, professional and business services, health care and construction, according to the report released by the Bureau of Labor Statistics (BLS). department.

“Amazingly strong job gains in February, but also surprisingly weak nominal wage gains,” Jason Furman, former chairman of the White House Council of Economic Advisers, said on Twitter.

The average hourly wage for all nonfarm private sector employees, at $31.58 in February, was “little changed” during the month, after strong increases in recent months, according to the BLS report.

Over the past 12 months, the average hourly wage has increased by 5.1%. Meanwhile, recent data from the Commerce Department showed personal consumption expenditure (PCE), the US Federal Reserve’s preferred gauge of inflation, rose 6.1% a year in January, the pace fastest annual in four decades.

Persistently high inflation and a tight labor market prompted the Federal Reserve to signal in January that it was ready to begin a series of interest rate hikes in March as it exited the ultra-accommodative monetary policy adopted. at the start of the pandemic.

Two days before the release of the monthly jobs report, Federal Reserve Chairman Jerome Powell has already reaffirmed the central bank’s plan to raise interest rates at the next policy meeting, noting that it is inclined to support a rate hike of 25 basis points.

“Inflation rose sharply last year and is now well above our longer-term target of 2%,” Powell said during a hearing before the House Financial Services Committee.

Noting that the labor market is “extremely tight,” the Fed chief said improvements in labor market conditions have been “widespread.”

U.S. Federal Reserve Chairman Jerome Powell testifies during a confirmation hearing before the Senate Banking Committee in Washington, DC, U.S., Jan. 11, 2022. (Graeme Jennings/Pool via Xinhua)

“The demand for labor is very strong, and although labor market participation has increased, labor supply remains subdued,” Powell said, adding that employers were struggling to fill vacancies.

Diane Swonk, chief economist at major accounting firm Grant Thornton, noted in a blog post Friday that Powell even called the labor market “overheated” in her testimony on Capitol Hill this week.

“This raises the question of whether rate hikes that slow the pace of hiring will be enough to derail inflation; the Fed may also have to let unemployment rise to boost the supply of workers,” Swonk said.

The latest BLS report showed that the labor force participation rate, at 62.3% in February, was little changed during the month. It remains below its pre-pandemic level of 63.4%.

“Much of the loss in participation can be attributed to retirements, which have accelerated with the pandemic and baby boom aging to retirement age,” Swonk noted.

“Another part is due to workers now caring for others, including children and elderly family members,” she said, adding that women tend to carry this burden more often than men. men.

The latest BLS data also showed the jobless rate edged down 0.2 percentage points to 3.8% in February, after rising 0.1 percentage points in January. This measure has declined significantly from its recent peak in April 2020, but remains above the pre-pandemic level of 3.5%.

The number of unemployed fell slightly to 6.3 million, after rising to 6.5 million the previous month, the report showed, adding that the number remained above the pre-pandemic level of 5.7 million.

Among the unemployed, the number of people who lost their permanent jobs changed little and remained at 1.6 million in February. The number of people on temporary layoff stood at 888,000 in February, which was also little changed during the month.

Earlier this week, payroll data firm Automatic Data Processing (ADP) reported that private companies in the United States added 475,000 jobs in February. Employers added 509,000 jobs in January amid the Omicron surge rather than cutting 301,000 workers as originally reported.

In February, large companies hired 552,000 workers, medium-sized companies 18,000, while small companies cut 96,000 employees, the report said, indicating an unbalanced recovery across different company sizes.

Nela Richardson, chief economist at ADP, noted that small businesses were losing ground as they continued to “struggle to keep pace with the wages and benefits needed to attract a limited pool of skilled workers.”

Initial jobless claims in the United States last week fell by 18,000 to 215,000, recording its second consecutive weekly decline after rising the previous week amid the Omicron surge, the US Department of Labor reported Thursday. .

(Web editor: Xia Peiyao, Liang Jun)

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