Unemployment ticked up to 3.6% in February as the U.S. added 311,000 jobs, according to a Bureau of Labor Statistics release Friday.
Economists expected the U.S. to add 225,000 jobs and unemployment to hold at January's 3.4%. But unemployment is now at its highest level since November.
Leisure and hospitality continued to gain jobs. The industry added 105,000 jobs in February, topping other industries. This month’s additions are close to the average gain over the past six months of 91,000, but the industry remains 2.4% below pre-pandemic employment levels.
The information industry, losing 25,000, and the transportation and warehousing industry, losing 22,000, were the only industries to suffer notable job losses, according to the report.
January’s job gains were revised down slightly to 504,000 from 517,000, and December’s gains were revised to 239,000 from 260,000.
Average hourly earnings rose by 0.2%, or 4.6% over the past 12 months. This was less than the expected 0.4% rise.
The report comes over a month after the Federal Reserve Bank slowed its pace of interest rate hikes. In February, the Fed raised interest rates by 0.25 percentage points after a 0.50 percentage point hike in December and four consecutive 0.75 percentage point hikes from June to November.
During the semiannual monetary policy report to Congress earlier this week, Fed Chair Jerome Powell referenced January's jobs report and inflation in more labor intensive services as some of the signs that the Fed may need to adjust its interest rate path.
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
The consumer price index, which is a measure of inflation, is expected to be released Tuesday.
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