February Jobs Report Shows Robust Growth and Easing Wage Gains

March 4, 2022

Job growth accelerated in February, posting the biggest monthly gains since July, as the labor force nears pre-pandemic levels.

The economy added 678,000 jobs last month, with the unemployment rate ticking down to 3.8%, the Labor Department’s Bureau of Labor Statistics reported. That is well above Dow Jones estimates of 440,000 new jobs and an unemployment rate of 3.9%.

The labor force grew by 300,000, but the number of Americans employed or actively seeking work remains 1.14 million short of pre-pandemic levels. Labor shortages remain a major obstacle, and as of the end of last year, there were 10.9 million unfilled positions, meaning there were 1.7 vacancies per available worker.

The report also contained a sign that inflation may be starting to cool. Wages for the month were essentially flat, climbing just 0.03%, or 1 cent an hour. Economists had forecast a 0.5% increase. On a year-over-year basis, the increase in wages was 5.13%, well below the 5.8% increase economists had expected.

The jobs report will likely do little to change the Federal Reserve’s plans regarding interest rate hikes, though the sign of cooling wage inflation does lessen the likelihood that the Fed will kickoff its tightening cycle with an aggressive half-point increase, as some traders are anticipating.

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