U.S. Employment Jumps More Than Expected, Unemployment Rate Rebounds
A closely watched report released by the Labor Department on Friday showed employment in the U.S. jumped by much more than expected in the month of February.
The Labor Department said non-farm payroll employment shot up by 311,000 jobs in February after spiking by a revised 504,000 jobs in January.
Economists had expected employment to increase by 205,000 jobs compared to the surge of 517,000 jobs originally reported for the previous month.
The stronger than expected job growth reflected notable increases in employment in the leisure and hospitality, retail, government, and healthcare sectors.
Meanwhile, decreases in employment in the information and transportation and warehousing sectors limited the upside.
Despite the stronger than expected job growth, the report said the unemployment rate rose to 3.6 percent in February from 3.4 percent in January. The unemployment rate was expected to be unchanged.
The unexpected increase came after the unemployment rate dropped to its lowest level since hitting a matching rate in May 1969.
The rebound by the unemployment rate came as the labor force surged by 419,000 persons, while the household survey measure of employment jumped by 177,000.
The Labor Department also said average hourly earnings crept up by $0.08 or 0.2 percent to $33.09 in February.
The annual rate of wage growth also accelerated to 4.6 percent in February from 4.4 percent in January, although the pace of growth was slower than the 4.8 percent spike expected by economists.
“The upshot is that it looks like the 25bp/50bp debate surrounding the rate hike decision later this month will come down to February’s CPI report, due next Tuesday,” said Paul Ashworth, Chief North America Economist at Capital Economics.
He added, “We still think the Fed will stick with a 25bp increase, but acknowledge that, after Powell’s hawkish testimony this week, it’s a very close call.”
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