US employers increased payrolls by 275,000 in February, blowing past Wall Street’s expectations and again proving the strength of the job market in the face of inflation and elevated borrowing rates.
The figure surpassed the 200,000 job gains economists expected for the month, and showed that January’s blockbuster 353,0000 job gains was not the one-month outlier some economists anticipated it to be.
Jobs across the health care, government and food services industries saw the strongest increase in February.
Employment across the electronics and appliance retailers decreased last month, according to the Labor Department.
Just as it has in recent months, Friday’s report proves that the job market has been resilient to stubbornly high inflation and elevated borrowing rates — stoking doubt that the Federal Reserve would consider cutting interest rates by June as widely anticipated on Wall Street.
The closely watched employment repotrt also showed that the unemployment rate ticked higher to 3.9%, breaking a three-month streak where the rate held steady at 3.7%.
The annual increase in wages — a key measure of inflation — edged up by five cents, to $34.57, after increasing by 18 cents in January.
Wage increases have historically been attributed to higher inflation rates because the cost of goods and services rises as companies pay their employees more.
Per the latest Consumer Price Index — which tracks changes in the costs of everyday goods and services — inflation rose a hotter-than-expected 3.1% in January, bolstered by an increases across the shelter index.
The Bureau of Labor Statistics is set to release CPI data for February on March 12.
Federral Reserve Chair Jerome Powell told US lawmakers just this week that progress on lowering inflation “is not assured.”
“If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in remarks prepared for delivery at a hearing before the House Financial Services Committee on Wednesday.
“But the economic outlook is uncertain, and ongoing progress toward our 2% inflation objective is not assured.”
He said that central bankers “would like to see more data that confirm and make us more confident that inflation is moving sustainably down to 2%” before reducing the policy rate.
Fed officials began their rate-hiking campaign in March 2022 to combat the worst bout of inflation in four decades.
AP
They boosted the benchmark federal funds rate 11 times in 2022 and 2023, lifitng it to its current 22-year high, between 5.25% and 5.5%, in July 2023.
Though a painful recession was widely predicted at the time, economists have since widely changed their stance, which has been attributed to the healthy job market.
On Wednesday, Powell insisted that “there’s no evidence, there’s no reason to think, that the US economy is in, or in some kind of short-term risk of, falling into recession.”
Far from it, Powell said the Fed was on a “good path” to achieve its hoped-for soft landing in which inflation continues falling to its 2% target while the economy grows and the unemployment rate remains low.
This story originally appeared on NYPost
