Job seeker Johannes Oveida looks over a brochure at a job fair at Lehigh Carbon Community College in Allentown, Pa., on Thursday, March 7, 2024. On Friday, March 8, 2024, the U.S. government issues its February jobs report. (AP Photo/Michael Rubinkam)
WASHINGTON (AP) – America’s employers delivered another healthy month of hiring in February, adding a surprising 275,000 jobs and again showcasing the U.S. economy’s resilience in the face of high interest rates.
Last month’s job growth was up from a revised gain of 229,000 jobs in January. The unemployment rate ticked up two-tenths of a point to 3.9% but was still the 25th straight month in which it has remained below 4%.
Friday’s government report reflected the job market’s sustained ability to withstand the 11 rate hikes the Federal Reserve imposed to fight inflation, which made borrowing much costlier for households and businesses. Employers have continued to hire briskly to meet steady demand from consumers across the economy.
Yet despite sharply lower inflation, a healthy job market and a record-high stock market, many Americans say they are unhappy with the state of the economy – a sentiment that is sure to weigh on President Joe Biden’s bid for re-election. Many voters blame Biden for the surge in consumer prices that began in 2021. Though inflationary pressures have significantly eased, average prices remain about 17% above where they stood three years ago.
When the Fed began aggressively raising rates in March 2022 to fight the worst bout of inflation in four decades, a painful recession was widely predicted, with waves of layoffs and high unemployment. The Fed boosted its benchmark rate to the highest level in more than two decades.
Inflation has eased, more or less steadily, in response: Consumer prices in January were up just 3.1% from a year earlier – way down from a year-over-year peak of 9.1% in 2022 and edging closer to the Fed’s 2% target.
Many Americans are exhibiting confidence in the economy through their actions: Consumers, whose average wages have outpaced inflation over the past year and who socked away money during the pandemic, have continued to spend and drive economic growth. The economy’s gross domestic product – the total output of goods and services – grew by a solid 2.5% last year, up from 1.9% in 2022. And employers keep hiring.
Immigration has helped invigorate the job market since the end of pandemic-related travel bans. Last year, foreign-born individuals accounted for 62%, or 1.5 million, of the 2.4 million people who either obtained a job or began looking for one. The economy’s growth depends on a steady influx of job seekers.
In the meantime, the job market’s modest slowdown is happening so far in perhaps the most painless way possible: Companies are posting slightly fewer job openings rather than laying people off. The number of Americans filing for weekly unemployment benefits – a rough proxy for the number of layoffs – has remained low, suggesting that most workers enjoy solid job security.
Wage growth still remains slightly high from the Fed’s perspective because it can contribute to inflation pressures. Some economists argue, though, that pay increases don’t need to drop so much: A surge in productivity that started last year – as companies invested in machines and used their workers more efficiently – means that employers can pay more and still reap profits without raising prices.
