The US jobless rate climbed to a two-year high in February even as hiring remained healthy, pointing to a cooler yet resilient labor market.
Nonfarm payrolls advanced 275,000 last month following a combined 167,000 downward revision to the prior two months, a Bureau of Labor Statistics report showed Friday. The unemployment rate rose to 3.9%.
| Metric |
Actual |
Estimate |
| Change in payrolls (MoM) |
+275,000 |
+200,000 |
| Unemployment rate |
3.9% |
3.7% |
| Average hourly earnings (MoM) |
+0.1% |
+0.2% |
The payrolls and wage numbers are derived from a survey of businesses and other employers, while the unemployment figures come from a separate, smaller poll of households.
Job growth in February was concentrated in service-providing sectors, including health care, leisure and hospitality, and the government, the government survey of establishments showed.
Stock futures rose while Treasury yields fell and the dollar weakened after the figures. Traders boosted bets on a June interest-rate cut, seeing that now as a certainty.
Resilient job creation and moderate pay gains continue to provide consumers the wherewithal to sustain their spending, even as they’re pinched by higher borrowing costs and prices. A gradual, yet uneven pickup in labor force participation has alleviated a great deal of the the tightness in the job market.
Federal Reserve officials are paying close attention to the job market and its impact on consumer spending as they assess the trajectory of inflation. The very gradual cooling in the labor market is part of the reason why policymakers have indicated they’re in no rush to cut interest rates.
“We’re seeing a labor market that is still tight, still strong, wages are moving up,” Fed Chair Jerome Powell said in testimony before Congress on Wednesday. “And we’re trying to use our policies to keep that growth going and to keep that labor market strong, while also achieving further progress on inflation.”
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