The U.S. economy added another solid round of new jobs last month, but slower-than-expected wage gains could ease concerns that a tight labor market will boost inflation pressures over the first half of the year.
The Labor Department's Bureau of Labor Statistics said 275,000 jobs were created in February, up from the sharply-revised total of 229,000 recorded in January and well ahead of the six-month average of around 248,000. Economists were looking for a headline total of 198,000.
Average hourly earnings eased notably from January and were up by a slower-than-expected 0.1%, the smallest increase since last autumn. The year-on-year gain slowed to 4.3% from 4.6%, a figure that also fell inside Wall Street forecasts and should soothe concern about spiraling wage gains.
Meanwhile, the the labor-force-participation rate both held at 62.5% while the headline unemployment rate edged higher to 3.9%.
“Today’s healthy jobs report, on the heels of January’s surprisingly strong numbers, continues to highlight the strength of the job market amid a generally strong U.S. economy," said Joe Gaffoglio, president of Mutual of America Capital Management. "Heading into 2024, market expectations were high for interest-rate cuts to begin as early as March, but Fed Chair Jerome Powell has made it abundantly clear that the central banks will take a cautious approach before moving ahead."
"The labor market’s continued strength, along with inflation lingering above the Fed’s stated goal of 2%, should not alter his thinking,” he added.
U.S. stocks turned higher following the data release, with the S&P 500 extending its record highs and rising 22 points, or 0.45%. The Dow Jones Industrial Average was marked 123 points higher while the tech-focused Nasdaq gained 104 points, or 0.64%.
It’s jobs day. #NFP
— Jumana Saleheen (@JumanaSaleheen) March 8, 2024
Headlines show mixed news.
NFP⬆️ 275k stronger than expected
Unemployment⬆️ to 3.9% pic.twitter.com/BLGTsY5OL6
Benchmark 10-year Treasury note yields were marked 2 basis points higher at 4.079% while 2-year notes were pegged 4.444%.
Earlier this week, payroll-processing group ADP said private-sector hiring improved to around 140,000 last month, just shy of Wall Street's 150,000 forecast, with the wage gains for job switchers falling to the lowest levels in more than two years.
Challenger Gray's benchmark report on corporate job losses, meanwhile, showed just under 85,000 firings last month, adding to the worst start to the year in terms of layoffs since 2009.
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