Job Market Stays Hot, Unemployment Ticks Higher: US Adds 311K Jobs In February, Exceeding Economist Expectations

The U.S. added 311,000 jobs last month, well above average economist estimates of 200,000 jobs.

What Happened: New data from the Bureau of Labor Statistics showed the U.S. unemployment rate is at 3.6%, above economist estimates of 3.5%. The labor participation rate was little changed at 62.5%, compared to the 63.4% pre-pandemic rate in February 2020.

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Wages were up 4.6% year-over-year and increased 0.2% from January. The leisure and hospitality industry led the job creation in February, adding 105,000 total positions.

The Labor Department also revised December's total job growth lower by 21,000 jobs to +239,000 and January's job growth lower by 13,000 jobs to +504,000.

Why It Matters: The Federal Reserve is paying close attention to the jobs market as the central bank continues its battle to bring inflation down to its 2% target range.

The Fed hiked interest rates by 25 basis points in February, bringing its target fed funds rate up to a range of 4.5% to 4.75%.

The Consumer Price Index (CPI) was up 6.4% in January, down from a 2022 peak of 9.1% in June. Following Friday's strong jobs report, the bond market is pricing in an 60.2% chance the Fed will opt for 0.5% interest rate hike in March.

Market Action: The SPDR S&P 500 ETF Trust SPY was trading 0.34% higher premarket Friday in the wake of the hot jobs report. 

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