US doesn’t see slowdown in Feb. payroll

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.

It was the third consecutive month of gains above 200,000, and the 38th month in a row of growth — fresh evidence that after surging back from 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.

The previous two months, December and January, were revised down by a combined 167,000 jobs, reflecting the higher degree of statistical volatility in the winter months. That does not disrupt a picture of consistent robust increases, which now looks slightly smoother.

At the same time, the unemployment rate, based on a survey of households, increased to a two-year high of 3.9%, from 3.7% in January. 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 stands at 7.3%.

The unemployment rate was driven by people losing or leaving jobs as well as those entering the labor force to look for work. The labor force participation rate for people in their prime working years — ages 25 to 54 — jumped back up to 83.5%, matching a level from last year that was the highest since the early 2000s.

Average hourly earnings rose 4.3% over the year, although 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.

While some pandemic-inflated industries have shed jobs, expected downturns in such sectors as construction haven’t materialized. Rising wages, attractive benefits and more flexible work schedules have drawn millions of workers off the sidelines.

Elevated levels of immigration have also added to the labor supply. According to an analysis by the Brookings Institution, the influx has about doubled the number of jobs that the economy could add monthly in 2024 without putting upward pressure on inflation, to between 160,000 and 200,000.

Health care and government again led the payroll gains in February, while construction continued its steady increase. Retail and transportation and warehousing, which have been flat to negative in recent months, picked up.

That doesn’t mean the employment landscape looks rosy to everyone.

Employee confidence, as measured by company-rating website Glassdoor, has been falling steadily as layoffs by tech and media companies have grabbed headlines. That’s especially true in white-collar professions, such as human resources and consulting.