US hiring COOLS – 311k jobs added in February, unemployment up to 3.6%

The US added 311,000 jobs in February, again beating estimates, but still representing fewer jobs than were added in January.

Dow Jones estimated that 225,000 hires would be made last month.

The unemployment rate dropped from 3.4 percent to 3.6 percent, which remains historically low, as the country recovers from the COVID-19 pandemic that rocked the economy three years ago.

President Joe Biden talks about what’s in his budget Thursday in Philadelphia

The government report on Friday made it clear that the nation’s job market remains fundamentally healthy, with many employers still eager to hire.

Fed Chairman Jerome Powell told Congress this week that the Fed would likely increase its rate hikes if signs continued to point to a robust economy and persistently high inflation.

A strong labor market typically leads companies to raise wages and then pass their higher labor costs on to customers through higher prices.

Last month, the government reported a surprising increase in hiring for January – 517,000 added jobs – although that gain was revised down slightly to 504,000 in Friday’s report.

Consumers also increased their spending in January, suggesting that the economy had strengthened earlier in the year.

The Fed’s preferred inflation gauge also accelerated.

With February’s sizable job growth following January’s expansionary gain, the Fed may accelerate its rate hikes to combat inflation.

When the Federal Reserve tightens credit, it typically leads to higher rates on mortgages, car loans, credit card loans, and many business loans.