The U.S. added 275,000 nonfarm payroll jobs in February as the unemployment rate ticked up to 3.9%, according to Bureau of Labor Statistics (BLS) data released Friday.
Economists anticipated that the country would add 200,000 jobs in February compared to the 353,000 that were added in January, and that the unemployment rate would remain at 3.7%, according to Reuters. The job gains were announced two days after Jerome Powell, chair of the Federal Reserve, told the House Financial Services Committee in its semi-annual monetary policy report that he does not believe that there is evidence for a recession, meaning rate cuts could be on the horizon. (RELATED: Companies Increasingly Turning To Cheap Foreign Labor As Rising Costs Take Their Toll)
Despite the huge gains in February, the number of jobs added in January was revised down by 124,000, while the number in December was revised down by 43,000, according to the report. Jobs gains were led by the health care sector, which added 67,000 in the month, followed by the government, which added 52,000.
The job gains are in contrast to a surge of layoffs in 2024, rising 3% in February and totaling 84,638. The increase in layoffs in February is on top of a 136% jump in January.
Consumers and businesses are increasingly feeling the pressure of high inflation, with prices rising 3.1% in February, bucking economists’ expectations of 2.9%, and sending the Dow Jones Industrial Average to its biggest drop since March 2023 as investors responded to the poor report.
Initial and continuing unemployment claims moved sideways last week; as layoffs continue slowly building and as it becomes more difficult for people to find new jobs, initial should break above 250k and continuing above 2 million: pic.twitter.com/de3mAtdhqA
— E.J. Antoni, Ph.D. (@RealEJAntoni) March 7, 2024
In response to high inflation, the Fed has placed its federal funds rate in a range of 5.25% and 5.50%, the highest level in 23 years. Investors are increasingly optimistic that the Fed will cut rates in the coming months, providing relief on interest rates for Americans, with a majority predicting a rate cut at the conclusion of the Federal Open Market Committee’s June meeting, according to CME Group as of Wednesday.
The U.S. economy grew 3.2% in the fourth quarter of 2023 after being revised down from an initial estimate of 3.3%, exceeding expectations of 2%, according to the Bureau of Economic Analysis. So far, the U.S. has managed to avoid a technical recession despite numerous predictions, but due to continued high inflation, more investors are projecting a “no landing” scenario where inflation remains elevated but economic growth remains robust.
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