Job Growth Surges in February, Sparking Worry About Fed Action
March 5, 2021
The U.S. economy added 379,000 jobs last month, far exceeding the 210,000 that economists had been expecting. January’s sluggish numbers also saw a significant upward revision, from an initial report of 49,000 to 166,000. The unemployment rate was down slightly to 6.2%. Economists had expected it to remain unchanged from January’s 6.3%.
The growth was driven primarily by an increase in restaurant and hospitality hiring, which is surprising considering much of the nation still has limits on indoor dining, and winter weather has made outdoor dining difficult.
Unexpectedly strong job growth has some investors concerned that the Federal Reserve may start tapering its asset purchases and raise interest rates. An analysis from the Wall Street Journal notes that such worries may be premature. The economy had 9.5 million fewer jobs in February than a year prior. Moreover, after the last recession, the Fed did not begin reducing its asset purchases until 2014, when employment was back to pre-crisis levels, and did not raise rates for another year after that.