Abridged Summary
February’s jobs report showed widespread strong jobs growth but lower real wages. Although the number of jobs in the nation is at 99% of its February 2020 level, inflation has risen much faster than wages, making people demonstrably worse off.
Headline Numbers
February’s jobs report showed better-than-expected jobs growth, with 678,000 nonfarm jobs added last month—well above Wall Street’s consensus prediction of 400,000. The unemployment rate fell 0.2 percentage points to 3.8%, and the labor force participation rate climbed to 62.3%.
The number of unemployed decreased 243,000 to 6.3 million. There are now 553,000 more unemployed people than two years ago in February 2020, the last month before the pandemic-related closures.
Highlighted Sectors
The private sector added 654,000 jobs, with the service sector contributing the bulk of job growth, accounting for 84% of private jobs added in January.
Job growth in leisure and hospitality accelerated in February, adding 179,000 jobs. The industry’s job level stands at 91% of its pre-pandemic amount.
Professional and business services continued to be one of the best-performing sectors in the labor market, gaining 95,000 jobs in February.
Job growth in health care accelerated as the sector added 63,500 jobs. The industry now has 98% of the number of employees in February 2020.
The construction sector gained 60,000 jobs last month as real estate prices continue to set new records each month.
Transportation and warehousing grew by 47,600 jobs. The industry now has 10% more jobs than in February 2020.
The retail sector added 36,900 jobs, more than expected.
Job growth also accelerated in manufacturing, where 36,000 jobs were added last month despite continued losses in automobile manufacturing.
Oil and gas extraction gained an anemic 2,400 jobs in February, even though crude oil is at a multi-year high and natural gas prices are near $5 per million BTUs.
Government saw an increase of 24,000 jobs, with nearly all of those gains coming from local government.
Earnings, Revisions, Miscellaneous
Average hourly earnings rose just 1 cent to $31.58, less than a 0.1% monthly increase. The most recent consumer price index data indicate that real wages have fallen roughly 2.4% over the last year.
December’s job report was revised up by 78,000 and January’s report by 14,000. These revisions, combined with February’s report, yield an additional 770,000 jobs.
The employment-population ratio increased to 59.9%, which is 1.3 percentage points below February 2020.
Prime age (25-54 years old) employment grew by 462,000 and is now 239,000 (0.2%) below its February 2020 level. The employment-population ratio for prime-age employees is 1.0 percentage points below its pre-pandemic level of 80.5%
The labor force grew 304,000 in January and is 592,000 below February 2020.
Recommendations
With college degree unemployment now down to just 2.2% and employment in this group 1.9 million higher than February 2020, there is no reason for the student loan moratorium to be extended again; the program should be retired.
The Federal Reserve should act immediately to rein in inflation.
The White House’s animosity toward reliable American energy is hampering growth in that industry and should be reversed.