(Washington) The US labor market remained strong in February while appearing to show the first signs of a long-awaited slowdown in the fight against inflation.
The unemployment rate remains low even though it climbed to 3.6%, after falling in January to 3.4%, its lowest level since 1969, the Labor Department announced on Friday.
Some 311,000 jobs have been created, compared to 504,000 in January, when only 205,000 were expected, according to the consensus of Briefing.com.
During a press briefing at the White House, US President Joe Biden declared himself “happy” with the data published, believing that they showed that “our economy is moving in the right direction”.
“In total, we’ve created more jobs in two years than any previous administration in four. This is not an accident, it is the demonstration that our economic program works”, welcomed Mr. Biden, stressing also that “the activity rate has never been so high since 2008”.
Leisure and hospitality, retail, government and health care sectors were job providers, the Labor Department said, but employment fell in information, transportation and warehousing.
“The data shows that the labor market remains strong,” commented Rubeela Farooqi, chief economist at HFE. “But a rising unemployment rate and weaker wage growth suggest an adjustment,” she added.
These data will weigh in the balance of the American central bank (Fed), which meets on March 21 and 22, and is worried about the still very high inflation. At stake: a rise in the key rate which will drive up interest rates on bank loans and further reduce household purchasing power.
Return of workers
US employers have been dealing with a labor shortage for about two years, which has contributed to rising prices.
However, the participation rate continued to rise in February, helping to push up the unemployment rate, but signaling the return of workers to the job market.
“Labour force participation rates for adult men and women have surpassed their pre-pandemic highs,” Treasury Secretary Janet Yellen said when questioned by a House of Representatives committee on Friday.
“When more people enter the labor market, it eases the conditions” and helps to “address the imbalance of supply and demand in [ce] market,” added Joe Biden’s Secretary of Economy.
Seeing prices stop soaring presupposes slowing down consumption and therefore economic activity, which is generally accompanied by a rise in unemployment. But so far, the successive increases in the key rate to increase the cost of credit decided by the Fed have had little effect.
Dismissals
“If all the data” on jobs, inflation, consumption, etc. “were to indicate that faster tightening was warranted, we would be ready to accelerate the pace of rate hikes,” the president said. of the Fed, Jerome Powell, before a Senate committee.
He had, however, considered “possible to bring inflation down to 2%, with less significant effects on the labor market” than during previous periods of economic slowdown.
Private sector employment figures, the monthly ADP/Stanford Lab survey released on Wednesday, showed hiring levels continued to be robust last month. “The slight slowdown in wage growth, alone, should not be able to bring down inflation quickly in the short term,” commented Nela Richardson, chief economist at ADP.
US employers, however, cut 77,770 jobs in February, their highest number for that month since 2009, then in the midst of the subprime mortgage crisis, according to a study by consulting firm Challenger, Gray & Christmas.
The tech sector, in particular, has multiplied the announcements of layoffs. But that’s only a small proportion of the US payroll. Retail and finance are also affected.