The February Employment Report

“Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.” – Fed Chair Janet Yellen (March 3)

Prior to seasonal adjustment, the U.S. economy added more than a million jobs in February (unadjusted payrolls rose by 831,000 in February 2016 and by 832,000 in February 2015). Mild weather likely played a part and there is the normal statistical uncertainty, making it hard to tell how much of the job gain is due to improved business confidence (weather and statistical noise will wash out over time). However, job growth is still expected to slow as the labor market tightens.

The unemployment rate edged back down to 4.7%, as labor force participation edged higher. The unemployment rate held steady at 4.1% for the key age cohort of 25-54. The employment/population ratio for this group continued to trend higher (not terribly far from the pre-recession level).