After reporting much stronger than expected job growth in the previous month, the Labor Department released a report on Friday showing another significant increase in U.S. employment in the month of February.
The report showed non-farm payroll employment spiked by 678,000 jobs in February after surging by an upwardly revised 481,000 jobs in January.
Economists had expected employment to jump by 400,000 jobs compared to the addition of 467,000 jobs originally reported for the previous month.
The stronger than expected job growth was led by increases in employment in the leisure and hospitality, professional and business services, health care, and construction sectors.
With another jump in employment, the unemployment rate dipped to 3.8 percent in February from 4.0 percent in January.
The unemployment rate, which was expected to edge down to 3.9 percent, fell to its lowest level since hitting 3.5 percent in February of 2020.
The bigger than expected decrease in the unemployment rate came as the household measure of employment jumped by 548,000 jobs, while the labor force increased by 304,000 persons.
The report also showed average hourly earnings inched up by a penny to $31.58 in February. The annual rate of wage slowed to 5.1 percent in February from 5.5 percent in January.
“The stronger than expected 678,000 gain in non-farm payrolls in February and upward revisions to previous months gains is another sign that the real economy has considerable momentum, with the Omicron wave having surprisingly little impact,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “That will give the Fed greater confidence to push ahead with its planned policy tightening but, with wage growth now leveling off, there is arguably less pressure for officials to front-load an aggressive series of rate hikes over the coming months.”
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