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US Adds 311,000 Jobs in February, But Unemployment Rate Rises to 3.6%

In this Thursday, June 4, 2020 file photo, a customer walks out of a U.S. Post Office branch and under a banner advertising a job opening, in Seattle. The job market took a big step toward healing in May 2020, though plenty of damage remains, as a record level of hiring followed record layoffs in March and April. The Labor Department reported Tuesday, July 7, 2020 that the number of available jobs rose sharply as well, but remained far below pre-pandemic levels. InternationalIndiaAfricaWASHINGTON (Sputnik) – The United States added 311,000 jobs in February, the Labor Department said Friday, reporting a number that again beat forecasts but not as much as in January, in what could be a relief to the Federal Reserve’s task of lowering inflation amid persistently strong labor and wage growth. Last month’s growth in so-called nonfarm payrolls comes after the outsized addition of 517,000 jobs in January. Economists had forecast a growth of 225,000 in February and 188,000 in January. In a further relief to the Fed, the unemployment rate expanded to 3.6% last month from 3.4% in January. Until Friday’s latest payrolls report, the Fed had been expected to settle on a 50-basis point hike at its upcoming March 22 rate decision. The relatively softer growth in February payrolls versus January prompted some analysts to think the central bank might opt for a more modest hike, although there was not enough consensus on that. For what it’s worth,’s Fed Rate Monitor Tool — an indicator of money market expectations for upcoming rate decisions — had a 72% chance of a 25 basis point hike at the Fed’s March 22 meeting. “The unemployment rate was higher and wages were lower than expectations,” economist Greg Michalowski said in a post on the ForexLive forum, referring to the February payrolls data. “Will the change in the calculus influence the Fed as well? Will they hold off on a 50 bp hike?” The Fed has said that a labor market slowdown will be necessary to cool inflation that proved more stubborn than thought. One of the Fed’s biggest challenges has been stellar jobs data as the nation’s labor market continues to stun economists with stupendous month after month. While policy-makers the world over typically celebrate on seeing good jobs numbers, the Fed faces a different predicament. The central bank wishes to see an easing of labor conditions that are a little “too good” now for the economy’s own good — in this case, unemployment at more than 50-year lows and average monthly wages that have grown without stop since March 2021. AmericasMore US Interest Rate Hikes Needed to Win Inflation Fight, Federal Reserve Says3 March, 18:29 GMTSuch job security and earnings have cushioned many Americans from the worst price pressures since the 1980s and encouraged them to continue spending, further feeding inflation. Economists say monthly jobs numbers need to grow meaningfully below expectations to create some ding at least in employment and wage security which the Fed suggests are its biggest two headaches now in fighting inflation. Inflation, as measured by the Consumer Price Index, hit a 40-year high of 9.1% in the United States during the year to June. It has moderated since, to an annualized growth of 6.4% in January, but remains well above the Fed’s target of just 2% per year. “Although inflation has been moderating in recent months, the process of getting inflation back down to 2 percent has a long way to go and is likely to be bumpy,” Fed Chair Jerome Powell said in testimony before the US Congress this week. “Recent economic data, particularly inflationary pressures, have been stronger than expected.” To clamp down on runaway price growth, the Fed added 450 basis points to interest rates since March last year via eight hikes. Prior to that, rates stood at nearly zero after the global outbreak of the coronavirus in 2020. The Fed’s first post-COVID hike was a 25-basis point increase in March last year. It then moved up with a 50-basis point increase in May. After that, it executed four back-to-back jumbo-sized hikes of 75 basis points from June through November. Since then, it has returned to a more modest 50-basis point increase in December and a 25-basis point hike in February.


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