Unemployment increased in February even as the number of new jobs exceeded analysts’ forecasts, according to data from the Bureau of Labor Statistics released Friday.
Total nonfarm employment increased by 311,000, surpassing analysts’ expectations of 225,000 new positions. The unemployment rate rose from 3.4% in January to 3.6% in February, likewise surpassing expectations of another 3.4% reading for a modest uptick in joblessness.
The increase in unemployment occurred in part because the labor force participation rate, which has failed to recover following the lockdown-induced recession, saw an increase from 62.4% in January to 62.5% in February, according to data from the Bureau of Labor Statistics. The metric tracks the share of the working-age population currently employed or seeking a position.
“Contributing to upward pressure here, there were more people looking for work,” Bankrate Senior Economic Analyst Mark Hamrick said in comments provided to The Daily Wire.
The labor market has widely been considered a bright spot in an otherwise dismal economic landscape characterized by record inflation and persistent supply chain bottlenecks. Low labor force participation across the economy has worsened both trends as businesses raise wages to fill their payrolls and attract or retain more workers.
The leisure and hospitality sector added 105,000 new positions, even as the industry is short 410,000 positions in comparison to the month before lockdown mandates were implemented throughout the nation, while the food services sector added 70,000 new positions. Job losses meanwhile occurred in the information sector, which lost 25,000 positions, as well as the transportation and warehousing sector, which lost 22,000 positions.
Nominal wages increased between February 2022 and February 2023 at a 4.6% rate, which failed to surpass inflation levels and implies a decreased purchasing power for households. Real wages previously fell 1.5% between January 2022 and January 2023.
“Along with the updates on the jobless rate and the number of jobs added, the wage growth component of the report is also closely watched, especially amid concerns about inflation,” Hamrick added.
CLICK HERE TO GET THE DAILY WIRE APP
The unemployment data comes as officials at the Federal Reserve continue to increase the target federal funds rate in order to combat inflation. Policymakers announced a 0.25% rate hike last month in a slowdown from previous 0.75% and 0.5% rate hikes. Members of the Federal Open Market Committee said in a statement that “ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive,” a sentiment confirmed by Federal Reserve Chair Jerome Powell in testimony before lawmakers.
“With the February jobs report now out of the way, Federal Reserve officials look next to the upcoming Consumer Price Index due Tuesday as they chart the future course of monetary policy in their battle against inflation,” Hamrick continued. “The forthcoming update on inflation at the retail level will help members of the Federal Open Market Committee decide their next interest rate hike for the March meeting as well as the possible future trajectory for rates.”
The data from the Bureau of Labor Statistics was issued after another release from the agency showed that the number of job openings in the United States has decreased to 10.8 million as of January. There were meanwhile 5.7 million unemployed individuals, implying that there are nearly two open positions for every available worker.