US employers add 275,000 jobs in February
Marks the 38th consecutive month of growth even as unemployment rate rises
If the economy is slowing down, nobody told the labor market.
Employers added 275,000 jobs in February, the Labor Department reported Friday, in another month that exceeded expectations even as the unemployment rate rose.
It was the third straight month of gains above 200,000 and the 38th consecutive month of growth — fresh evidence that four years after going into pandemic shutdowns, America’s jobs engine still has plenty of steam.
“We’ve been expecting a slowdown in the labor market, a more material loosening in conditions, but we’re just not seeing that,” said Rubeela Farooqi, chief economist at High Frequency Economics.
In Massachusetts, employers added 18,300 jobs in January, according to a release from the Executive Office of Labor and Workforce Development. That compared with December’s revised gain of 4,600 jobs, down from the originally reported increase of 13,900 jobs.
The state’s jobless rate dipped to 3 percent in January from 3.2 percent in the previous month. The labor force — the number of people with jobs or looking for one — rose by 400. Massachusetts will release February employment data on March 22.
Previously reported national figures for December and January were revised downward by a total of 167,000, reflecting the higher degree of statistical volatility in the winter months. That does not disrupt a picture of consistent, robust increases.
At the same time, the unemployment rate, based on a survey of households rather than businesses, increased to a two-year high of 3.9 percent. The increase from 3.7 percent in January was driven by people losing or leaving jobs as well as those entering the labor force to look for work.
A more expansive measure of slack labor market conditions, which includes people working part time who would rather work full time, has been steadily rising and now stands at 7.3 percent.
In a positive sign, the labor force participation rate for people in their prime working years — ages 25 to 54 — jumped to 83.5 percent, matching a level from last year that was the highest since the early 2000s. The participation rate for those older than 55 remains markedly below its pre-pandemic level, potentially in part because the booming housing and stock markets have allowed more people to retire.
Average hourly earnings rose 4.3 percent over the year. Wages have outpaced prices since May, though the pace of increases has been fading.
“We’ve recently seen gains in real wages, and that’s encouraged people to reenter the labor market, and that’s a good development for workers,” said Kory Kantenga, a senior economist at job search website LinkedIn. As wage growth slows, he said, the likelihood that more people will start looking for work falls.
As late as the fall, economists were predicting much more modest employment increases, with hiring concentrated in a few industries. Some pandemic-inflated industries have shed jobs, but expected downturns in sectors such as construction have not materialized.
The last few months have been studded with strong economic data, prompting analysts surveyed by the National Association for Business Economics to raise their forecasts for gross domestic product and lower their expectations for the trajectory of unemployment. Inflation has eased, leading the Federal Reserve to telegraph its plans for interest rate cuts sometime this year, which many see as insurance should the job market stumble.
Health care and government again led the payroll gains in February, while construction continued its steady increase. Retail, restaurants, transportation and warehousing, which have been flat to negative in recent months, picked up.
No major industries lost a substantial number of jobs. High interest rates continue to suppress manufacturing, however, while credit intermediation continued its downward slide — that sector, which mostly includes commercial banking, has lost about 123,000 jobs since early 2021.
Employee confidence, as measured by company rating website Glassdoor, has been falling steadily as layoffs by tech and media companies have grabbed headlines. That is especially true in white-collar professions such as human resources and consulting, while those in occupations that require working in person — such as health care, construction, and manufacturing — are more upbeat.
“It is a two-track labor market,” said Aaron Terrazas, Glassdoor’s chief economist, noting that job searches are taking longer for people with graduate degrees. “For skilled workers in risk-intensive industries, anyone who’s been laid off is having a hard time finding new jobs, whereas if you’re a blue-collar or front-line service worker, it’s still competitive.”
Those having a hard time finding steady employment turn increasingly to gig work, Terrazas noted, which is not picked up in the payrolls data.