US job growth accelerates in February; unemployment rate rises to 3.9%

Nonfarm payrolls increased by 275,000 jobs last month, the labor Department’s Bureau of Labor Statistics said in its closely watched employment report on Friday. Data for January was revised down to show 229,000 jobs created instead of 353,000 as previously reported.

Economists polled by Reuters had forecast 200,000 jobs added, with estimates ranging from 125,000 to 286,000. Payrolls are above the roughly 100,000 jobs needed per month to keep up with growth in the working age population.

The labor market is supporting the economy, which is outperforming its global peers. Economists do not expect a recession this year. The unemployment rate rose to 3.9% in February after holding at 3.7% for three straight months.

Despite a rash of high-profile layoffs at the start of the year, employers are generally holding on to their workers after struggling to find labor during the COVID-19 pandemic. Though labor supply and demand are falling back into balance, amid a rise in immigration and older workers delaying retirement, some sectors of the economy remain desperate for skilled workers.

There were 1.45 open jobs for every unemployed person in January, still above the average of 1.2 during the year before the pandemic, government data showed this week. The Fed’s Beige Book report also showed “difficulties persisted attracting workers for highly skilled positions” in February. Average hourly earnings edged up 0.1% last month after gaining 0.5% in January. That lowered the year-on-year increase in wages to a still-high 4.3% in February from 4.4% in January. Fed Chair Jerome Powell told lawmakers this week that rate cuts would “likely be appropriate” later this year, but emphasized they “really will depend on the path of the economy.”