(MENAFN) Employers in the United States added 311,000 jobs in February, indicating a stable labor market, despite efforts by the Federal Reserve to slow economic growth. The Department of Labor released the figures on Friday, which exceeded economists' expectations of 208,000 job additions for the month, according to financial data company FactSet. The jobless rate rose to 3.6 percent from 3.4 percent the previous month, as more Americans entered the workforce in search of employment.
The leisure and hospitality, retail, health care, and government sectors had robust hiring, according to the Labor Department. A "scarce talent market" has persisted in the US, leading employers to hire workers, noted Becky Frankiewicz, president of the recruiting company Manpower Group. PNC chief economist Gus Faucher noted that the job growth remains above the economy's long-term potential, making it "much too hot for the Federal Reserve."
January's unexpectedly strong hiring, when employers added 517,000 jobs, was higher than the current payroll numbers. The Fed has raised interest rates over the past year to slow down the economy, but the tight job market and robust hiring may heighten the risk of high inflation, which could prompt policymakers to speed up rate hikes.
The central bank is likely to raise the federal funds rate by half a percentage point when it meets in two weeks due to February's job data, exceeding the earlier expectations that the Fed would raise rates by a quarter point, according to Faucher.
More Americans are searching for work, with approximately 419,000 people joining the job market in February compared to January, Faucher noted. This helped to increase the labor force participation rate to 62.5 percent, the highest rate since the pandemic began. However, participation remains lower than its pre-pandemic level of 63.3 percent, as many adults face health issues, child care responsibilities, or other challenges.
The average hiring rate for the past three months is 351,000, which is not far off from the 400,000 three-month average recorded in 2022, according to Brian Coulton, chief economist of Fitch. Coulton noted that if job growth remains at this pace, labor market imbalances are unlikely to ease.
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