The US economy created fewer jobs in February than in January, but more than expected, and the unemployment rate rose, the Labor Department said on Friday.
311,000 jobs were created last month, compared to 504,000 in January (figure revised downwards). Analysts were expecting 205,000 creations.
As for the unemployment rate, it climbed to 3.6%, after falling in January to 3.4%, its lowest level since 1969.
“Notable job gains have taken place in leisure and hospitality, retail, government and healthcare. Employment fell in information and in transportation and warehousing,’ the Labor Department said in its statement.
This employment report is of particular importance because, after two years of labor shortages, it will weigh heavily on the balance of the American central bank (Fed), which meets on March 21 and 22, and is worried about the still very high inflation.
At stake: a rise in the key rate may be greater than expected, which will drive up interest rates on bank loans and further reduce household purchasing power.
“If all the data” on employment, inflation, consumption, in particular, “should indicate that a faster tightening was justified, we would be ready to accelerate the pace of rate hikes”, declared Tuesday the Fed Chairman Jerome Powell before a Senate committee.
Wage increase
Seeing prices stop soaring presupposes slowing down consumption, and therefore economic activity, which is generally accompanied by a rise in unemployment.
However, so far, the actions of the Fed, that is to say the successive increases in the key rate to increase the cost of credit, have had little effect on the economy.
Jerome Powell had however judged ‘possible to bring inflation back to 2%, with less significant effects on the labor market’ than what had been observed in previous periods of economic slowdown.
The private sector employment figures, the monthly ADP/Stanford Lab survey published on Wednesday, had however shown a still robust level of hiring, which is good for the economy and the workers, but the growth of salaries is still quite high,” commented Nela Richardson, chief economist at ADP.
‘The slight slowdown in wage growth alone should not be able to bring down inflation quickly in the short term,’ she said.
Dismissals
But the next day, a study by the consulting firm Challenger, Gray & Christmas, showed that in February, American employers cut 77,770 jobs, four times more than a year ago.
It is even the largest number of job cuts for the month of February since 2009, then in the midst of the subprime crisis.
‘It seems clear that employers remain attentive to the Fed’s planned rate hike. They are expecting a turnaround (of the American economy, editor’s note) and are lowering their spending everywhere,’ estimated the vice-president of the cabinet, Andrew Challenger, quoted in a press release.
The tech sector, in particular, has multiplied the announcements of layoffs. But that’s only a small proportion of the US payroll. The retail and financial sector, however, are also affected.
Another signal of a possible slowdown: jobless claims rose above 200,000 during the week of February 27 to March 4, for the first time since the start of the year, the Labor Department said on Thursday. Although at historically low levels, these listings could start to signal the turnaround in the labor market, some economists say.
/ATS
