Washington DC, March 10, 2023 — America’s employers added a substantial 311,000 jobs in February, fewer than January’s huge gain but enough to keep pressure on the Federal Reserve to raise interest rates aggressively to fight inflation.
The unemployment rate rose to 3.6% from a 53-year low of 3.4%, as more Americans began searching for work and not all of them found jobs.
Friday’s report from the government made clear that the nation’s job market remains fundamentally healthy, with many employers still eager to hire. Fed Chair Jerome Powell told Congress this week that the Fed would likely ratchet up its rate hikes if signs continued to point to a robust economy and persistently high inflation. A strong job market typically leads businesses to raise pay and then pass their higher labor costs on to customers through higher prices.
Last month, the government reported a surprising burst of hiring for January — 517,000 added jobs — though that gain was revised down slightly to 504,000 in Friday’s report. Consumers also ramped up their spending in January, suggesting that the economy had strengthened at the start of the year. The Fed’s preferred inflation gauge also accelerated.
With February’s sizable job growth coming after January’s expansive gain, the Fed may accelerate its rate hikes to combat inflation. When the Fed tightens credit, it typically leads to higher rates on mortgages, auto loans, credit card borrowing and many business loans. – AP