U.S. jobs growth slowed in February from the previous month’s record pace, but remained high enough to put pressure on the Federal Reserve to consider moving to a bigger interest rate hike.
The world’s largest economy added 311,000 jobs last month, more than the 225,000 expected by economists, but less than a downwardly revised 504,000 in January. Despite those gains, the unemployment rate rose to 3.6 percent, still the lowest in decades.
Wage growth, meanwhile, rose 0.2 percent from January, not shy of the previous monthly rise in average hourly earnings. On an annual basis, it is up 4.6 percent.
February’s report, released by the Bureau of Labor Statistics on Friday, is one of the most important data releases ahead of the central bank’s next policy meeting on March 21-22.
In congressional testimony this week, Fed Chairman Jay Powell said he would examine the data coming next week, among other things, such as inflation and retail sales figures. Information.
“They will be very important in the assessment of the high readings we’ve had recently and the overall direction of the economy and our progress in reducing inflation,” he said on Wednesday, stressing that no decision had been made. More done. “The final level of interest rates will be higher than previously expected,” Powell added.
In February, the Fed called time on jumbo rate hikes and has repeatedly moved in half-point and three-quarter-point intervals over the past year, offering more traditional quarter-point increases. At the time, Powell justified the small rate hike by arguing that it would “well allow” officials to monitor progress toward their goal of controlling inflation, and said that a “deflationary process” was underway.
But continued labor market tightening and renewed consumer strength have raised expectations about the path forward for policy. Economists warn that January’s data is not a one-off, prompting the central bank to opt for a bigger hike.
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