The United States added 678,000 jobs in February while the national unemployment rate fell to 3.8%, according to data released Friday morning by the U.S. Department of Labor Bureau of Labor Statistics (BLS).
What happened: The rise in job creation in February “was broad-based, led by gains in leisure and hospitality, professional and business services, healthcare and construction.” The number of unemployed for February stood at 6.3 million.
The BLS acknowledged that the latest numbers are below pre-pandemic levels; in February 2020, the month before the start of the COVID-19 crisis in the United States, the unemployment rate was 3.5% and the number of unemployed was 5.7 million.
What else happened: Among major demographic groups, the BLS reported lower unemployment rates for (3.5%) and Hispanics (4.4%), while unemployment rates for adult women (3.6%), teenagers (10.3%), Whites (3.3%), Blacks (6.6%) and Asians (3.1%) saw little to no change from the previous month.
The number of people out of work for less than five weeks fell by 286,000 to 2.1 million last month, while the number of long-term unemployed – defined as those who were out of work for 27 weeks or more – remained virtually unchanged at 1.7 million, although it is also 581,000 higher than in February 2020 before the pandemic. The long-term unemployed accounted for 26.7% of the total number of unemployed last month.
Also in February, 4.2 million people declared unable to work because their employer closed or lost their business due to the pandemic, compared to 6 million in January. Of this group, 20.3% received at least some compensation from their employer for hours not worked, down from 23.7% in January. The BLS also identified 1.2 million people who said they were prevented from looking for work due to the pandemic, up from 1.8 million the previous month.
See also: Russian invasion creates ‘upward pressure on inflation’, says Powell
What this means: Reaction to the jobs data was mixed.
Joe Brusuelaschief economist at RSM US LLPobserved, “The increase in employment of 678,000 in February – the three-month average is 582,333 – and the drop in the unemployment rate to 3.9% imply that there is ample room for the Federal Reserve raises the key rate by 25 basis points at its meeting on March 16, 2022 despite the growing risks to the domestic and economic outlook linked to geopolitical tensions.
But Bruesalas warned that it was difficult to make the case that hiring will continue at such a pace given the risks from the war in Ukraine.
“If this conflict evolves in such a way that it results in a complete removal of the roughly six million barrels a day that Russia exports – which we believe is only a matter of days – from world markets, sending the oil prices rising well above current levels, it is only a matter of time before there is a significant change in the pace and composition of hiring in the labor market And that will shape the pace and scale of the Fed’s policy normalization drive this year,” he said in an email.
George Ratiuhead of economic research at real estate agent.coma unit of News Corp’s (NASDAQ: NWSA) Move Inc. subsidiary, also saw positive and negative aspects in the data.
“The numbers highlight that we have nearly two job openings for every unemployed person. The continued rise in #employment is good news for households struggling with rising #inflation and rising #cost The main concern in February was that the average hourly wage remained virtually unchanged, after notable gains over the past six months. With higher costs for food, cars, gasoline, clothing and housing, American families are strapped for financial resources,” Ratiu said in a Tweeter.
Dr. Anthony B. Sandersprofessor emeritus of real estate finance at George Mason University and former director and former head of asset-backed and mortgage-backed securities research at Deutsche Bank AG (NYSE: DB), took a reference from a Sergio Leone film to explain what the new data could mean for the economy in the near term.
“The good: 678,000 jobs have been added,” he added. wrote in his blog Founded Interest. “The negatives: Monthly wages grew by 0% (although year-on-year growth declined to 5.1%). The worst: Inflation is still at its highest level in 40 years at 7 .5% This means REAL wage growth is -2.4%.”
And Keith McCulloughCEO of Hedgeeye Risk Managementwas even more pessimistic, Tweeter“This whole very late-cycle jobs report guarantees the Fed is going to make some policy mistakes.”
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