The U.S. added 311,000 jobs in February, and unemployment saw a minor increase to 3.6%, according to the latest Employment Situation Summary from the U.S. Bureau of Labor Statistics.
The analysis found that along with the unemployment rate, the number of unemployed persons, at 5.9 million, edged up in February. The unemployment rate and number of unemployed persons have shown little net movement since early 2022.
In addition, the report saw notable job gains in leisure and hospitality, retail trade, government and health care. Transportation, warehousing and information, on the other hand, saw decreases.
Key highlights:
- Leisure and hospitality added 105,000 jobs in February, similar to the average monthly gain of 91,000 over the prior six months. Food services and drinking places added 70,000 jobs, and employment continued to trend up in accommodation (+14,000). Employment in leisure and hospitality is below its pre-pandemic February 2020 level by 2.4%.
- Employment in professional and business services continued to trend up (+45,000), with a gain of 12,000 in management, scientific and technical consulting services. Employment in professional and business services had increased by an average of 35,000 per month over the prior six months.
- Government employment increased by 46,000, about the same as the average monthly gain of 44,000 over the prior six months. Employment in local government continued to trend up (+37,000). Overall, employment in government is below its pre-pandemic February 2020 level by 1.6%.
- Healthcare added 44,000 jobs compared with the average monthly increase of 54,000 over the prior six months. Job growth occurred in hospitals (+19,000) and in nursing and residential care facilities (+14,000).
- Employment in retail trade rose by 50,000 in February, reflecting a gain in general merchandise retailers (+39,000). Retail trade employment has experienced little change over the year.
- Construction employment grew by 24,000, which is in line with the average monthly growth of 20,000 over the prior six months.
- Transportation and warehousing lost 22,000 jobs, including 9,000 in truck transportation. Employment in transportation and warehousing is down by 42,000 since October 2022.
- Average hourly earnings for all employees on private nonfarm payrolls rose by 0.2% to $33.09. Over the past 12 months, average hourly earnings have increased by 4.6%. Average hourly earnings of private-sector production and nonsupervisory employees rose by 0.5% to $28.42.
- The labor force participation rate was little changed at 62.5%, and the employment-population ratio remained at 60.2%. These measures have shown little net change since early 2022 and remain below their pre-pandemic February 2020 levels (63.3% and 61.1%, respectively).
Major takeaways:
MBA Vice President and Deputy Chief Economist Joel Kan commented:
“Fed Chair Powell communicated earlier this week that incoming data on the U.S. economy continues to show strength and that a higher level of interest rates, and potentially for a longer period of time, is likely needed to cool inflation. On net, this report does show some slowing, particularly with respect to the breadth and the amount of job growth.
“We expect the unemployment rate to increase over the course of this year as the economy cools, reaching 4.8% at the end of the year.
“The housing market typically benefits from strong employment conditions, but as monetary policy has tightened to combat inflation, bringing about higher rates and tighter financial conditions, homebuyers have pulled back over the past year. We expect the economy to go into a mild recession this year, and with that, a cooling in home prices and lower mortgage rates, which should help affordability conditions and bring a gradual recovery in housing activity.”
NAR Chief Economist Lawrence Yun commented:
“The job market is improving in the right way. More jobs are being created, but even more importantly, a greater number of Americans are seeking jobs. Consequently, wage pressure is lessening. With inflation tilting toward deceleration—that is, still rising but at a slower rate—the mortgage rate can also tilt downward in the upcoming weeks. Recently, we’ve seen several weeks of rising mortgage rates due to bad inflation figures coming out of consumer prices, producer prices and the GDP personal consumption expenditure deflator. But today’s wage gain of 4.4% is more restrained, and points toward signs of lower future inflation numbers as more Americans find work and more goods and services are produced. Americans faced falling living standards earlier when wages were rising by 6% while consumer inflation was running at 9%. It’s possible that by the year’s end, wage growth will be 4%, while consumer price inflation runs at 3%, thereby boosting living standards. More importantly for real estate, mortgage rates can now steadily trend downward.”
For the full report, click here.
