America’s employers added 311,000 jobs in February, fewer than January’s huge gain but enough to keep pressure on the Federal Reserve to raise interest rates to fight inflation.
What happened
The unemployment rate rose to 3.6%, from a 53-year low of 3.4%, as more Americans began searching for work but not all of them found jobs, , according to data released Friday from the Bureau of Labor Statistics.
“The entire labor market is cooling off,” said Luke Tilley, chief economist at wealth manager Wilmington Trust. “But it’s still incredibly tight. It’s just not as tight as it was in the middle of last year or in 2021.”
Why it matters
A strong job market typically leads businesses to raise pay and then pass their higher labor costs on to customers through higher prices.
From October through December, the average monthly job gain was 284,000. That average has surged to 351,000 for the past three months.
What it means
Such outsize hiring may propel the Fed to accelerate its rate hikes to try to tame still-high inflation. When the Fed tightens credit, it typically leads to higher rates on mortgages, auto loans, credit card borrowing and many business loans.
What’s next
What the Fed may decide to do about interest rates when it meets later this month remains uncertain. The decision will rest, in part, on its assessment of Friday’s jobs data and this week’s report on consumer inflation in February.
— From wire reports
