US February Jobs Surge by 678,000... Fed Tightening Likely Supported by Employment Momentum

[Asia Economy New York=Special Correspondent Joselgina] U.S. jobs showed a much larger increase than market expectations. The unemployment rate fell to its lowest level since the pandemic. With solid employment indicators, the U.S. Federal Reserve's (Fed) move to raise interest rates in March is expected to gain momentum.

The U.S. Department of Labor announced on the 4th (local time) that nonfarm payrolls increased by 678,000 in February. This far exceeded the market forecast of 423,000. The Labor Department stated, "This is the largest increase since July last year."

This is interpreted as the employment market regaining vitality as the impact of the spread of the new COVID-19 variant Omicron subsides.

By sector, jobs in the leisure and hospitality sector, which was hit hard by the pandemic, increased by 179,000. Jobs in professional and business services and healthcare also rose by 95,000 and 64,000 respectively. The Wall Street Journal (WSJ) evaluated that "the hospitality industry, including hotels, restaurants, and resorts, led the employment market last month."

The unemployment rate in February was 3.8%, down 0.2 percentage points from the previous month (4.0%). It is close to the pre-pandemic level of 3.5%.

The labor force participation rate, an indicator watched by the Fed, rose slightly to 62.3%. However, it is still 1.1 percentage points lower than before the spread of COVID-19.

The average hourly wage rose by only 0.03% ($0.01) compared to the previous month. The year-over-year increase rate was also 5.13%, below market expectations.

The Fed's interest rate hike move is expected to gain strength. Mike Fratantoni, Chief Economist at the Mortgage Bankers Association, said, "Despite market volatility caused by the Ukraine situation, recent remarks by Fed officials reaffirm that the Fed still plans to raise rates in March."

The employment data on this day did not reflect the impact of Russia's invasion of Ukraine. There are also views that future oil price increases and the Fed's interest rate hikes could pose new threats to employment recovery.

This content was produced with the assistance of AI translation services.