The economy again blew past expectations and added 678,000 jobs in February, an encouraging sign that the labor market is returning to its pre-pandemic strength.
The unemployment rate ticked down to 3.8%, the Bureau of Labor Statistics reported Friday — the lowest since the start of the pandemic and near the lowest levels of the past half-century.
Job growth has defied fears that the outbreak of COVID-19 driven by the omicron variant would cause a pullback in the job market. Friday’s report showed that job gains for December and January were revised up by a combined 92,000, meaning that employment growth averaged more than 500,000 a month throughout the omicron surge.
Friday’s report is good news for President Joe Biden, who is languishing with low approval ratings and has been knocked by Republicans for his handling of the country’s economy but has claimed credit for other good job reports.
Job growth in February was strong across many sectors but was led by gains of 179,000 in the leisure and hospitality sector, which has been hit hard by the pandemic shutdowns.
“What this tells me is that the U.S. economy is open for business,” said John Leer, Morning Consult’s chief economist. “Omicron is in the past, and businesses expect demand to remain strong going forward.”
The unemployment rate, in particular, indicates that the labor market is tight. It has fallen dramatically from its peak of 14.7% during the worst of the pandemic. The unemployment rate has consistently ticked down almost every month over the last two years and is now not too far above the ultra-low 3.5% rate prior to the onset of the global health crisis.
POWELL SAYS FEDERAL RESERVE BRACING FOR OIL PRICE HIKES AS RUSSIA WAGES WAR IN UKRAINE
COVID-19 has been in rapid decline since mid-January, when new cases peaked at about 800,000 per day. New cases are now averaging just over 50,000 per day, a 56% decrease from two weeks ago. Hospitalizations and deaths have also declined by 43% and 21%, respectively, during that same period of time.
For many, it appears the coronavirus is now in the rearview mirror. Biden held the first State of the Union of his presidency Tuesday, one which was notably different than his joint address to Congress last year, which featured social distancing and masks. This year Biden was met with a packed chamber and an almost entirely unmasked audience.
The Biden administration, though, is being plagued by inflation. Consumer prices rose 7.5% in the 12 months ending in January, the fastest pace of inflation in four decades and a sizable half-percentage-point increase from December’s number.
The Federal Reserve is preparing to jack up interest rates for the first time in years this month. While the first rate increase is expected to be a usual quarter-percentage-point hike, Fed Chairman Jerome Powell has not ruled out half-point hikes after future committee meetings later this year.
Powell testified before Congress on Wednesday and Thursday and faced questions not just about the central bank’s plan to raise interest rates, but also about how Russia’s invasion of Ukraine might affect the rate hikes and America’s economy. Powell said that while there is uncertainty surrounding the events in Europe, the Fed is staying the course on its plans to tighten its monetary policy.
“The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain,” the chairman said Wednesday. “Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook.”
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Charles Evans, the president of the Federal Reserve Bank of Chicago, said on CNBC after Friday’s report that job numbers have been strong for some time now.
“Today’s labor report it’s good news. It doesn’t really change anything that Chair Powell was sort of prepositioning the Fed for the other day,” Evans said of the Fed’s plans to begin tightening.
