According to the Labor Department, U.S. employers experienced an increase of 275,000 jobs in February, although the unemployment rate also saw a slight uptick.
According to a survey conducted by LSEG, economists had anticipated an increase of 200,000 jobs, with the unemployment rate expected to remain steady at 3.7%.
The hiring of health care and government employees, along with food services, fueled the growth, while the manufacturing sector saw a reduction of 4,000 positions.
Average hourly earnings, a crucial gauge of inflation, rose by 0.1% for the month and witnessed a 4.3% surge compared to the same period last year. Several economists believe that the combination of robust job growth and increasing wages is driving inflation.
The numbers may not be enough for the Federal Reserve, which expects inflation and the economy to slow, to begin its rate-cutting cycle, which would coincide with the 2024 presidential election.
“After a series of exceptionally strong labor market reports that threatened to disrupt the expected easing of monetary policy, this data serves as a warning to those concerned about the inflationary pressure on the U.S. economy and the potential impact on interest rates,” said Glassdoor’s chief economist Aaron Terrazas.
Earlier this week, Fed Chairman Jerome Powell emphasized policymakers’ commitment to lowering inflation in order to drop rates.
“The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” he said in remarks prepared for House Financial Services Committee testimony.
Higher interest rates cause consumers to pay more for things like auto loans and credit cards. As an example, Lending Tree tracks the average percentage rate (APR) for credit cards, which is 24.61%.
The market is currently anticipating the first rate cut to occur in June, according to the CME’s FedWatch Tool.
