Saturday, April 1, 2023

The unemployment rate in the US rose two tenths in February, up to 3.6%

The unemployment rate in the United States grew two tenths in February and stood at 3.6%, according to data published this Friday by the Bureau of Labor Statistics (BLS).

In the second month of the year, 311,000 jobs were created, 206,000 less than those created in January, at a time when the Federal Reserve is closely observing the effects of interest rate hikes -approved to reduce inflation- have on economic developments and specifically on the labor market.

This rise in the unemployment rate comes after three consecutive months in which it had fallen and could reflect the beginning of a relaxation in the labor market that the Fed expects as a consequence of its restrictive monetary policy.

Based on this figure, and on inflation for February, which will be known next week, the Federal Reserve will decide the amount of the next rate hike that it will announce after the next meeting of its Open Market Committee, to be held between March 21 and 22.

Although it is still a solid figure, the 311,000 jobs created are well below the more than half a million (517,000) originated in January, and also below the average job creation in 2022 (401,000).

Despite the lower job creation, the president, Joe Biden, welcomed the data and pointed out that the still strong job creation is a sign that the economy “is moving in the right direction.”

“It’s not just good numbers. People can notice it, they are going back to work”, he pointed out in an appearance organized to assess the data, where he said that since he took office in January 2021, “more jobs have been created in two years than any government in the first four years”.

According to the BLS, the number of unemployed thus stands at 5.9 million, in a month in which there have been “notable increases” in job creation in leisure and hospitality, retail, government and care sanitary. Jobs were lost, however, in the transportation, storage and information sectors.

The BLS also revised last year’s figures and noted that the total nonfarm employment level for March 2022 was revised upwards by 568,000, meaning half a million more jobs were created last year than counted.

Average hourly earnings for all employees on private nonfarm payrolls increased 8 cents, or 0.22%, to $33.09 in February, according to data released today. Over the last 12 months, the average hourly wage has increased by 4.6%.

The number of people who lost their jobs and people who completed temporary jobs increased by 223,000 in February to US$2.8 million.

The number of people out of work for less than 5 weeks increased by 343,000 to 2.3 million in February, while the number of long-term unemployed (those without work for 27 weeks or more) was little changed in February at 1.1 million, 17.6% of the total number of unemployed.

These data are released in a delicate economic context, when all eyes are on the possible consequences of rate hikes for the US labor market.

Last month the Federal Reserve announced its eighth consecutive interest rate hike to control prices. Now they are located in a range between 4.5 and 4.75%, the highest figure in 16 years.

The Fed has warned that although job creation remains one of the regulator’s main mandates, the labor market is likely to suffer in the coming months.

Coinciding with the dissemination of unemployment data, the White House published this Friday a memorandum of the two years of Biden’s Economic Rescue Plan, in which “the strongest job recovery on record” has taken place, they say. During this time, more than 12 million jobs have been created.


Please enter your comment!
Please enter your name here

Latest article