Another US hiring surge
(continued from Page 3) The Fed’s final determination, though, will rest heavily on Tuesday’s report on consumer prices. “Everything now hinges on February’s CPI report,” said Paul Ashworth, an economist at Capital Economics. Nearly all of last month’s hiring occurred in services industries, with a category that includes restaurants, bars, hotels and entertainment adding 105,000 jobs, its second straight month of strong gains. Warmerthan-usual weather likely contributed to the gain. With the weather likely allowing more building projects to continue, construction companies added 24,000 jobs.
Retailers added more than 50,000 jobs last month, health care providers 63,000. Local and state governments — some of them flush with cash from stimulus programs — added 46,000 jobs.
Much of that job growth reflects continuing demand from Americans who have been increasingly venturing out to shop, eat out, travel and attend entertainment events — activities that were largely restricted during the height of COVID.
In contrast to the solid services hiring, manufacturers cut 4,000 jobs. And a sector that includes technology and communications workers shed 25,000 jobs, its third straight month of losses. It is a sign that some of the announced layoffs in the economy’s tech sector are being captured in the government’s data.
Last month, the government reported a surprising burst of hiring for January — 517,000 added jobs — though that gain was revised down slightly to 504,000 in Friday’s report. The vigorous job growth for January was the first in a series of reports to point to an accelerating economy at the start of the year. Sales at retail stores and restaurants also jumped, and inflation, according to the Fed’s preferred measure, rose from December to January at the fastest pace in seven months.
The stronger data reversed a cautiously optimistic narrative that the economy was cooling modestly — just enough, perhaps, to tame inflation without triggering a deep recession. Now, the economic outlook is hazier.
High borrowing rates have cratered the housing market, with home sales having dropped for 12 straight months, a consequence of the average mortgage rate nearly doubling over that time.
Hiring at February’s pace is still about triple the level the Fed would prefer. Job gains of about 100,000 a month would be just enough to keep up with population growth and prevent unemployment from rising. A figure that low would also mean that employers weren’t so desperate for workers and wouldn’t have to keep raising wages.
Higher pay is great for employees, of course. But Fed officials say it is contributing to higher inflation, particularly in laborintensive service industries like restaurants, health care and hotels.