BloombergWASHINGTON (Bloomberg) — The U.S. economy enjoyed the biggest hiring spree since mid-2016 in February as workers streamed in from the sidelines of the labor force, while inflation pressures remained muted amid signs the pay gains that spooked financial markets last month haven’t taken hold.
Payrolls rose 313,000 in February, compared with the 205,000 median estimate in a survey of economists, and the two prior months were revised higher by 54,000, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, the fifth straight month at that level. Average hourly earnings increased 2.6 percent from a year earlier following a downwardly revised 2.8 percent gain.
U.S. stock futures and bond yields rose, as the report signaled the labor market remains strong and will keep driving economic growth. The wage figures show a cooling from a pace that spurred financial turbulence last month on concern that the Federal Reserve could raise interest rates faster. While the unemployment rate remains well below Fed estimates of levels sustainable in the long run, the rise in participation suggests the presence of slack that would keep policy makers to a gradual pace of hikes.
“This is a report that’s going to strengthen the argument of some of the doves on the Fed, that people came back to the labor force last month — that’s a positive sign for the U.S. economy,” Alan Krueger, a Princeton University professor who served as chairman of the Council of Economic Advisers under President Barack Obama, said on Bloomberg Television. “We’ll see how long that can continue.”
For now, rising labor-force participation may be a factor holding down wage gains. The participation rate increased to 63 percent, the highest since September, from 62.7 percent the prior month, the biggest monthly gain since 2010. The number of employed people in the workforce rose by 785,000, according to the report.
Fed policy makers are widely anticipated to raise interest rates when they next meet March 20-21 in Jerome Powell’s first gathering as chairman. A bigger question is whether central bank officials maintain projections for a total of three quarter-point hikes this year, or boost the outlook to four.Speech