U.S. employers added 275,000 jobs in February and the unemployment rate ticked higher, the Labor Department reported Friday.
Economists surveyed by LSEG expected a gain of 200,000 jobs and the unemployment rate to hold steady at 3.7%.
Growth was driven by the hiring of health care and government employees, along with food services. On the flip side, the manufacturing sector cut 4,000 positions.
Average hourly earnings, a key measure of inflation, increased 0.1% for the month and climbed 4.3% from the same time one year ago. Strong job growth combined with rising wages is fueling inflation, according to some economists.
NUMBER OF HIGH-PAYING JOBS IS DWINDLING
The data may not be enough for the Federal Reserve, which is looking for inflation and the economy to slow, to begin its rate-cutting cycle, which would also come heading into the 2024 presidential election.
“After a series of exceptionally strong labor market reports that threatened to disrupt the expected easing of monetary policy, this data serves as a warning to those concerned about the inflationary pressure on the U.S. economy and the potential impact on interest rates,” said Glassdoor’s chief economist Aaron Terrazas.
Earlier this week, Fed Chairman Jerome Powell reiterated policymakers’ stance to bring down inflation in order to cut rates.
“The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” he said in remarks prepared for testimony before the House Financial Services Committee.
Higher rates have consumers paying more for things such as auto loans and credit cards. As an example, the average percentage rate (APR) for credit cards is 24.61%, as tracked by Lending Tree.
LOWER INFLATION KEY TO FED CUTTING INTEREST RATES
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Currently, the market is expecting the first rate cut to come in June, as tracked by the CME’s FedWatch Tool.
FOX Business’ Megan Henney contributed to this report.
Original article source: US economy adds 275,000 jobs in February, unemployment rate ticks higher
