The latest employment report from the Bureau of Labor Statistics reveals that the US economy added 311,000 jobs in February, exceeding economists' predictions of 205,000 new positions. While this is a slight decrease from January's report, which saw the addition of a revised 504,000 jobs, it still indicates a labor market emitting plenty of heat. Despite a slight uptick in unemployment from 3.4% to 3.6%, February's net job gains remain well above pre-pandemic norms, where only around 180,000 jobs were added per month between 2010 and 2019.

However, the labor market remains tight, and imbalances persist in the ongoing recovery efforts from the devastating pandemic. There are still fewer people in employment than pre-pandemic projections suggested, with Fed Chair Jerome Powell stating that more than three million people have yet to return to the workforce. This is due to the pandemic accelerating expected demographic trends such as increased retirements, people dropping out of the workforce for care-related needs and health concerns like long Covid, and hundreds of thousands of workers dying from the coronavirus.

While this report is considered vital, it may be seen as bad news for the Federal Reserve's campaign to curb high inflation. The Fed has been battling for almost a year to slow the economy and crush the highest inflation in 40 years, but the labor market defies those efforts. Consequently, PNC Financial Services chief economist Gus Faucher predicts that the Fed will have to continue to hike interest rates, which makes a recession more likely. Faucher expects the Fed to go forward with a half-point rate hike at its March 21-22 meeting, a higher pace than the recent, more moderate quarter-point increase.

The pandemic has also created significant labor shortages in specific sectors, such as the hospitality industry, which has been crushed during the pandemic but has been steadily adding back employees and trying to meet increased demand from consumers shifting their spending from goods to services. The monthly employment report shows that the economy is still experiencing significant challenges despite recent job gains.

심예준 강남포스트 학생기자  webmaster@ignnews.kr

<저작권자 © 강남포스트, 무단 전재 및 재배포 금지>