The nation’s unemployment rate seemingly spiked in February even as the total number of new jobs quickly blew past the forecasts from analysts, as reported by data from the Bureau of Labor Statistics that was recently made public.
The total nonfarm employment went up by 311,000, shocking analysts who expressed expectations of only 225,000 new positions. The unemployment rate climbed from 3.4% in January to 3.6% in February, which ended up flying past expectations of another 3.4% reading for the moderate increase in total joblessness.
The overall increase in unemployment took place mostly due to the changes in the labor force participation rate, which has failed to bounce back in the wake of the lockdown-induced recession, went through an increase from 62.4% in January to 62.5% in February, as expressed in the data made public by the Bureau of Labor Statistics. That particular metric tracks the share of the working-age population currently working or attempting to get a position.
“Contributing to upward pressure here, there were more people looking for work,” explained Mark Hamrick, a Senior Economic Analyst with Bankrate, in recent statements.
The labor market has widely been thought of as a bright spot in the overall dark economic landscape plagued by persistent supply chain bottlenecks and record-shattering inflation. A drop in labor force participation all throughout the economy has ended up making both trends worse as businesses raise wages to fill their payrolls and attract or retain more workers.
Both the hospitality and leisure sectors managed to bring on 105,000 new positions, even as the industry as a whole is sitting short close to 410,000 positions when compared to the month prior to the lockdown mandates being set up across the nations, while the food services sector managed to tack on 70,000 new spots. Job losses meanwhile took place throughout the information sector, which bled over 25,000 spots, as well as the transportation and warehousing sector, which lost 22,000 positions.
Between February 2022 and February 2023, nominal wages managed to climb at a rate of 4.6%, which ended up failing to surpass inflation levels and implying a drop in the real purchasing power for the average household. Real wages dropped by 1.5% over the same period 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,” explained Hamrick.
This unemployment data was made public just as officials from the Federal Reserve elected to continue their plan to raise the target federal funds rate in order to try and fight the rising inflation levels.