US employers added 678,000 jobs in February, far more than economists expected – in a sign that businesses are returning to normal operations as COVID-19 case totals drop following the Omicron variant surge.
The US unemployment rate was 3.8%, down from 4.0% in January, according to the latest data from the Labor Department’s Bureau of Labor Statistics.
Economists had expected the latest jobs report to show the US economy added 440,000 jobs in February, according to Dow Jones estimates. The national unemployment rate was expected to fall slightly to 3.9%.
February’s hiring totals were even higher than last month’s stronger-than-expected jobs report. In January, employers added 467,000 jobs – far more than most analysts predicted – as businesses shook off chaotic conditions caused by the Omicron surge.
Earlier this week, the ADP National Employment Report, which tracks hiring by private employers, found companies added 475,000 jobs in January – more than 400,000 that economists estimated, according to Dow Jones.
While the latest figures suggest businesses are continuing their recovery from the difficulties of the COVID-19 pandemic, more trouble could be coming.
Russia’s invasion of Ukraine has sparked fears of global economic instability due to surging energy prices, further supply chain disruptions and potential reverberations from crippling sanctions imposed on the Russian economy.
“While uncertainty associated with Russia’s invasion of Ukraine is top of mind, American security job is solid and likely set to improve further if the unemployment rate slips further in coming months,” said Mark Hamrick, senior economic analyst at Bankrate.
The February jobs report data will be one of several factors under consideration when Federal Reserve officials meet later this month.
Fed Chair Jerome Powell has indicated he plans to propose a quarter-percentage-point rate hike – a move that has been telegraphed for months as the central bank aims to cool inflation. The central bank previously indicated it was waiting for the economy to reach what it considers to be full employment before raising rates.
Many employers are offering enhanced pay and benefits to lure workers in a tight labor market. While the competitive market has increased leverage for many workers during the hiring process, inflation has effectively erased strong wage growth in recent months.
The most recent Consumer Price Index data showed inflation at 7.5% — the highest level in four decades. And earlier this week, Powell warned that inflation could surge even higher as oil and energy prices rise during the Russia-Ukraine war.