New Jobs Numbers May Keep Pressure on Fed

Employers hired 311K in February, more than expected
By Newser Editors and Wire Services
Posted Mar 10, 2023 7:49 AM CST
New Jobs Numbers May Keep Pressure on Fed
A hiring sign is displayed at a grocery store in Arlington Heights, Ill., in this file photo.   (AP Photo/Nam Y. Huh, File)

America’s employers added a substantial 311,000 jobs in February, fewer than January’s huge gain but enough to keep pressure on the Federal Reserve to raise interest rates aggressively to fight inflation, per the AP. The number was above expectations of 208,000.

  • Rate: The unemployment rate rose to 3.6% from a 53-year low of 3.4%, as more Americans began searching for work and not all of them found jobs.
  • Wage gains: Not everything was "robust." Average hourly earnings rose 0.24% for the month, below expectations of 0.4%, reports CNBC.
  • Big picture: Friday’s report from the government made clear that the nation’s job market remains fundamentally healthy, with many employers still eager to hire. Fed Chair Jerome Powell told Congress this week that the Fed would likely ratchet up its rate hikes if signs continued to point to a robust economy and persistently high inflation. A strong job market typically leads businesses to raise pay and then pass their higher labor costs on to customers through higher prices.

  • Market reaction: Investors apparently aren't spooked by the new numbers. Futures for the benchmark S&P 500 rose modestly when the report came out, per CNBC, shifting from slightly negative to slightly positive. That might be because of the lower-than-expected wage gains.
  • Tea leaves: With February’s sizable job growth coming after January’s expansive gain, the Fed may accelerate its rate hikes to combat inflation. When the Fed tightens credit, it typically leads to higher rates on mortgages, auto loans, credit card borrowing, and many business loans.
(More unemployment stories.)

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