Updated at 8:59 AM EST
The U.S. economy added another solid round of new jobs last month, but slower-than-expected wage gains could ease concerns that a tight labor market will boost inflation pressures over the first half of the year.
The Labor Department’s Bureau of Labor Statistics said 275,000 jobs were created in February, up from the sharply-revised total of 229,000 recorded in January and well ahead of the six-month average of around 248,000.
Economists were looking for a headline total of 198,000.
Average hourly earnings eased notably from January and were up by a slower-than-expected 0.1%, the smallest increase since last autumn. The year-on-year gain slowed to 4.3% from 4.6%, a figure that also fell inside Wall Street forecasts and should soothe concern about spiraling wage gains.
Meanwhile, the headline unemployment rate and the labor-force-participation rate both held, at 3.7% and 62.5% respectively.
“Today’s healthy jobs report, on the heels of January’s surprisingly strong numbers, continues to highlight the strength of the job market amid a generally strong U.S. economy,” said Joe Gaffoglio, president of Mutual of America Capital Management. “Heading into 2024, market expectations were high for interest-rate cuts to begin as early as March, but Fed Chair Jerome Powell has made it abundantly clear that the central banks will take a cautious approach before moving ahead.”
“The labor market’s continued strength, along with inflation lingering above the Fed’s stated goal of 2%, should not alter his thinking,” he added.
Slower-than-expected wage gains colored a solid February jobs report.
Spencer Platt/Getty Images
U.S. stocks turned higher following the data release, with futures contracts tied to the S&P 500 indicating a 21 point gain and those tied to the Dow Jones Industrial Average suggesting a 65 point advance. The tech-focused Nasdaq is called 75 points higher.
It’s jobs day. #NFP
Headlines show mixed news.
NFP⬆️ 275k stronger than expected
Unemployment⬆️ to 3.9% pic.twitter.com/BLGTsY5OL6
— Jumana Saleheen (@JumanaSaleheen) March 8, 2024
Benchmark 10-year Treasury note yields were marked 2 basis points (0.02 higher at 4.071% while 2-year notes were pegged 4.444%.
Earlier this week, payroll-processing group ADP said private-sector hiring improved to around 140,000 last month, just shy of Wall Street’s 150,000 forecast, with the wage gains for job switchers falling to the lowest levels in more than two years.
Challenger Gray’s benchmark report on corporate job losses, meanwhile, showed just under 85,000 firings last month, adding to the worst start to the year in terms of layoffs since 2009.
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