U.S. payrolls added 678,000 jobs in February driving the unemployment rate down to 3.8 percent.
The U.S. Bureau of Labor Statistics (BLS) report on Friday said the number of unemployed shrank to 6.3 million, and the unemployment rate is nearing the February 2020 low of 3.5 percent.
Retail trade employment rose by 37,000 jobs last month, with furniture and home furnishings stores gaining 6,000 jobs. In general, retail trade employment is 104,000 above February 2020, the BLS report said. In other employment gains, the leisure and hospitality services added 179,000, with job growth in line with more people returning to offices and Omicron waning.
The wholesale trade added 18,000 jobs last month, although employment in the industry is 113,000, or 1.9 percent, lower than in February 2020. Manufacturing added 36,000 jobs last month, with nondurable goods manufacturing adding 16,000 positions. Since February 2020, employment in the manufacturing sector is down by 178,000, or 1.4 percent. Transportation and warehousing employment jumped by 48,000 and is 584,000 higher than in February 2020.
February’s jobs data is significantly higher than the 440,000 economists expected.
“While Omicron disruptions are now behind us, severe recruitment and retention difficulties persist. Wages continue to rise and this will put more pressure on already elevated price inflation,” Frank Steemers, senior economist at The Conference Board, said.
Although average hourly earnings rose 5.1 percent over the past 12 months, Steemers said rising inflation is eating into wage gains. “We expect wage growth to remain elevated as labor shortages will persist going forward. The inflation outlook is less certain,” Steemers said. “The recent invasion of Ukraine by Russian forces may drive up highly volatile food and energy prices. On the other hand, easing supply-chain issues and the Fed’s plans to raise interest rates may somewhat offset rising inflation during 2022.”
For the rest of the year, Steemers projected 3 million jobs could be added following the 1.2 million jobs gained from January and February combined. While slower job growth is expected as the “economy decelerates towards its long-run growth rate,” the overall unemployment rate could get close to 3 percent by the end of the year, he said.
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Dollar General, which is planning to add 1,110 new stores in Fiscal 2022, said on Friday it will create “10,000 net new careers” through new stores, a distribution center and its private fleet network. The new jobs will add 6 percent to its current workforce of 162,000 employees.
Other retailers including Abercrombie & Fitch will add to their store network and create new jobs in the process.
“We continue to make meaningful and positive investments in our hometowns through new store and distribution center growth, which allows us to remain dedicated to support our diverse employees with training, development, advancement and education opportunities,” said Kathy Reardon, Dollar General’s executive vice president and chief people officer.
Wells Fargo Securities economists Sarah House and Michael Pugliese in a report on Friday said the “solid state of the labor market alongside the most significant inflation in decades leads us to believe that so long as the Russia-Ukraine conflict does not significantly escalate, the [Fed Reserve] is poised to begin a tightening cycle on March 16.”
The pair also found that increased worker availability appeared to have taken the edge off current wage pressures, as the average hourly earnings in February remained unchanged.
“While we suspect wage pressures will remain fairly strong in light of the overall tight state of the labor market, the easing in February reduces concerns about wage growth running away and taking inflation with it,” they said.