The end of February sees the jobs market continuing to be tight, though some soft spots are starting to show (hiring has moderated somewhat, and wage growth is high but cooling). It’s not enough, however, for the Federal Reserve to discontinue the cadence of interest rate hikes.
The labor market saw strong gains again in February by adding over 300K jobs, proving January’s numbers were not a fluke. Hiring remains robust particularly in the leisure and hospitality sector, responsible for 1/3 of the February gains.
The Numbers*:
- The unemployment rate comes in at 3.6% (up from 3.4%).
- New jobs added: 311,000 jobs were added in February.
- Notable findings: This is stronger than the forecast of 225K. Hiring remains robust in leisure, hospitality and healthcare, with additional strong gains in the retail and government sectors. Of the 311K new jobs added, 105K were in leisure and hospitality – even higher than the +91K average for the sector over the last six months. This sector remains 2.4% below pre-pandemic levels. Construction, a key industry to watch as a recession indicator, rose by 24K jobs in February, higher than the +20K average for the last six months and declines were seen in information, and transportation and warehousing.
- Open jobs were down from 11.2M to 10.8M, but there is still almost double the number of jobs available as there are people to fill them.
- There was a slight change in the labor force participation rate, up to 62.5% from 62.4%, the highest level since March 2020.
- Job quits in February were down slightly from 4K to 3.8K or from 2.6% to 2.5% but remained historically high.
- Wage growth continues, with hourly wages up 4.6% over the prior year, a jump from the 4.4% increase in January. That’s still good news for inflation, as the increase was below the YOY estimate of 4.8%, and the monthly increase of 0.2% was less than the 0.4% estimate.
Gains, Losses and Insights:
Initial jobless claims rose in the first week of March (211K new claims), which was higher than expected. We also see claims rise from 1.6 million to 1.7 million, hitting the highest since January 2022. Career Services firm Challenger, Gray & Christmas reported (according to Forbes) that U.S. employers have announced plans to cut more than 180K employees this year, which would be the fastest pace since 2009. However, in February, layoffs remained low, despite warnings from Big Tech.
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* Above represents February 2023 Data
Sources:
- https://www.bls.gov/news.release/empsit.nr0.htm
- https://www.cnbc.com/2023/03/10/heres-where-the-jobs-are-for-february-2023-in-one-chart.html
- https://www.cnbc.com/2023/03/10/jobs-report-february-2023.html
- https://www.cnbc.com/2023/02/03/6-things-to-know-in-a-juggernaut-of-a-job-market.html
- https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20230308.pdf
- https://finance.yahoo.com/news/february-jobs-report-march-10-2023-124602371.html
- https://www.forbes.com/sites/jonathanponciano/2023/03/09/jobless-claims-unexpectedly-rise-to-2023-high-as-fed-hikes-threaten-new-waves-of-layoffs/?sh=77623440418e
- https://tradingeconomics.com/united-states/job-offers
- https://www.whitehouse.gov/cea/written-materials/2023/03/10/the-employment-situation-in-february-3/
