Workers are commanding far less influence on wage increases as they return to the job market in the post-pandemic era, at least according to data from the February employment report.
The U.S. economy added for more than expected new jobs last month, the Labor Department said Friday, while noting that wage increases slowed sharply, suggesting new hires are commanding far less influence on pay deals as they return to the workforce.
The Bureau for Labor Statistics said 678,000 new jobs were created in February, with headline unemployment rate falling to a post-pandemic low of 3.8%. The February tally was firmly ahead of the Street consensus forecast of 425,000.
The BLS also revised its January jobs addition tally to 481,000 total from its original estimate of 467,000.
The BLS noted that hourly wages, however, were flat on the month, and up 5.1% on the year to $31.58 per hour, a figure that will raise huge questions as to the pace of wage inflation, its extended impact on the broader inflation reading and the ability of workers to demand higher pay as pandemic benefits fade and job openings begin to erode. Analysts had expected a month-on-month increase of around 0.6%.
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Futures contracts tied to the Dow Jones Industrial Average were marked 250 points lower while those linked to the S&P 500 and Nasdaq Composite fell 25 points and 70 points respectively.
Earlier this week, Payroll processing group ADP said in its National Employment Report, which it compiles with Moody’s Analytics, that the economy added 475,000 private sector jobs last month while making a massive revision to its January total, which it changed from a loss of 301,000 to a gain of 509,000.
