160,315,000: Record Number of Americans Employed in February

(CNSNews.com) – After a very strong showing in January, the nation’s employment situation showed no significant softening in February, and that suggests the Federal Reserve may respond with another round of interest rate hikes.

The economy added a strong 311,000 non-farm jobs in February, well above estimates of 205,000, but well below the (revised) 504,000 non-farm jobs added in January.

As usual, notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing.

The number of employed Americans set another record, the third once since December, increasing by 177,000 to 160,315,000 in February, which is up from 160,138,000 in January and 159,244,000 in December.

The number of unemployed Americans — those who are looking for a job and are available for work — also increased, by 242,000, and that pushed the unemployment rate up two-tenths of a point in February to 3.6 percent from the 54-year low of 3.4 percent set in January. (The unemployment rate was 6.3 percent when Biden took office.)

The number of Americans participating in the labor force continued to rise in February, another positive sign.

In February, the civilian non-institutional population in the United States was 266,112,000. That included all people 16 and older who did not live in an institution, such as a prison, nursing home or long-term care facility.

Of that civilian non-institutional population, 166,251,000 were participating in the labor force, meaning they were either employed or unemployed — they either had a job or were actively looking for one during the last month. This resulted in a labor force participation rate of 62.5 percent in February — up from 62.4 percent in January, and the highest it’s been since Joe Biden became president.

The number of Americans counted as not in the labor force — no job and not looking for one — dropped to 99,861,000 from 100,130,000 in February, the lowest it’s been since September 2022.

Among the major worker groups, the unemployment rate for Hispanics (5.3 percent) increased in February. The unemployment rates for adult men (3.3 percent), adult women (3.2 percent), teenagers (11.1 percent), Whites (3.2 percent), Blacks (5.7 percent), and Asians (3.4 percent) changed little over the month.

Wages continue to rise, but they’re rising less than inflation: In February, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, or 0.2 percent, to $33.09. Over the past 12 months, average hourly earnings have increased by 4.6 percent (versus inflation running at 6.4 percent over 12 months in January).

The change in total nonfarm payroll employment for December was revised down by 21,000, from +260,000 to +239,000, and the change for January was revised down by 13,000, from +517,000 to +504,000. With these revisions, employment gains in December and January combined were 34,000 lower than previously reported.

Federal Reserve: Reducing inflation may impact labor market

In a speech earlier this week, Federal Reserve Chairman Jerome Powell noted that although inflation has moderated somewhat since the middle of last year, it remains well above the Fed’s target of 2 percent.

To get back to 2 percent inflation, Powell expects there to be some deterioration in labor market conditions, including wage growth.

“Although nominal wage gains have slowed somewhat in recent months, they remain above what is consistent with 2 percent inflation and current trends in productivity,” Powell said. “Strong wage growth is good for workers but only if it is not eroded by inflation.”

Powell noted that the unemployment rate was 3.4 percent in January, its lowest level since 1969. “Job gains remained very strong in January,” he said, “while the supply of labor has continued to lag. As of the end of December, there were 1.9 job openings for each unemployed individual, close to the all-time peak recorded last March, while unemployment insurance claims have remained near historical lows.”

Powell said the Fed will use its tools (interest rate hikes) to bring inflation down and keep it around 2 percent: “Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run. The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”

The Fed has raised interest rates by 4-1/2 percentage points over the past year. “We continue to anticipate that ongoing increases…will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”

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