The unemployment rate reversed course and rose to 3.6% in February from 3.4% in January, which was its lowest level since 1969. Separately, the U.S. Bureau of Labor Statistics also reported that nonfarm payrolls rose by 311,000 in February 2023, below the monthly pace of 343,000 over the prior six months, but still strong. Market expectations had called for a gain of less than 225,000 jobs. Revisions subtracted 34,000 positions to total payrolls in the previous two months.
Today’s report shows the labor market remains strong with the economy still creating jobs at a rapid, albeit, slowing pace. That said, the slight rise in the jobless rate and a slowing in average hourly earnings suggest a potential adjustment in the labor markets is starting to occur. This report is not likely to change the path of the Federal Reserve which continues to increase interest rates to slow the economy in its fight against inflation. All eyes will now be focused on the CPI report to be released next week as the market tries to determine how much higher the Fed will push interest rates.
Employment in health care rose by 44,000 in February, compared with the average monthly increase of 54,000 over the past six months. Employment in nursing care facilities grew by 5,400 jobs from last month and 43,500 from year-earlier levels and stood at 1,386,800 positions. Jobs increased by 9,600 positions in CCRC and assisted living facilities and were up by 60,300 from year-earlier levels to 940,300 jobs.
In the household survey conducted by the BLS, the jobless rate increased 0.2 percentage point to 3.6%, up from 3.4% in January which was the lowest rate since 1969. Both months’ unemployment rates were well below the 14.7% peak seen in April 2020. The underemployment rate was 6.8% versus 6.6% in January.
Average hourly earnings for all employees on private nonfarm payrolls rose by $0.08 in January to $33.09. This was a gain of 4.6% from year-earlier levels.
The labor force participation rate inched up to 62.5% in February, up from 62.4% in January and the highest level since March 2020. It was below the February 2020 level of 63.3%, however.
Among the major worker groups, the January unemployment rates were 3.2% for adult women, adult men (3.3%), teenagers (11.1%), Whites (3.2%), Hispanics (5.3%), Blacks (5.7%), and Asians (3.4%), according to the U.S. Bureau of Labor Statistics.