Job creation in the US sets a new record in February, but unemployment grows to the highest level in two years

Workers build a battery factory in DeSoto, Kansas, in May 2023.Charlie Riedel (AP)

Job creation in the US in February exceeded all analysts' expectations, which pointed to the addition of 190,000 jobs, well below the surprising record figure in January.

In the end there were 275,000, while salary increases were moderated.

All of this adds to signs of sustained economic growth and softer inflation.

The data demonstrates the solidity of the US economy and gives clues to the Federal Reserve regarding the rate cut schedule.

Unemployment rose last month to 3.9%, its highest level in two years.

The sectors that created the most jobs were health, public administration, restaurants, social assistance, transportation and logistics.

The unemployment rate is the highest in two years, but the strength in hiring points to a colder labor market - wage increases have slowed down - but resilient.

Data from the US Bureau of Labor Statistics describe a labor market that is gradually shrinking, with episodic slowdowns like those recorded in October, and with more moderate increases in employment and wages that suggest that the economy will continue to expand without much risk of a spike in inflation.

This combination gives Federal Reserve policymakers room to lower interest rates this year, although its president, Jerome Powell, avoided giving a specific date in his appearance this week in Congress.

The S&P 500 and Nasdaq Composite jumped after the numbers were announced, but were already slightly higher in pre-market trading, suggesting investors are not overly concerned about the jobs numbers dramatically altering cutback plans. of Federal Reserve rates.

The yield on two-year Treasury bonds, which are more sensitive to imminent monetary policy movements, fell six basis points to 4.44%.

The dollar fell.

In February, the unemployment rate rose 0.2 percentage points, to 3.9%, and the number of unemployed increased by 334,000 people, to 6.5 million.

A year earlier, the unemployment rate was 3.6% and the number of unemployed was six million.

Among the main groups of workers, unemployment rates increased for adult women (3.5%) and adolescents (12.5%).

The unemployment rate for adult men (3.5%), whites (3.4%), blacks (5.6%), Asians (3.4%) and Hispanics (5.0%) barely changed in February .

One of the possible reasons for the slight rebound in the unemployment rate since the beginning of the year could be the increase in the number of black and Hispanic workers looking for work and not finding it.

White unemployment remains at around 3.4%, while both black and Hispanic unemployment have increased about one percentage point from their historic lows this cycle.

The metrics for calculating job creation differ from those for unemployment.

The payroll and salary figures come from a survey of companies and other employers, while the unemployment figures come from a smaller survey of households.

This latest survey shows that part of the increase in the unemployment rate is due to people entering the workforce not finding work right away.

The number of long-term unemployed (those without work for 27 weeks or more), 1.2 million, barely changed in February.

The long-term unemployed represent 18.7% of the total unemployed, compared to 20.8% a year ago.

This seems to indicate that, even if laid-off workers do not find another job quickly, there are still relatively few signed up for unemployment for months.

In the summer of 2011, after the Great Recession, approximately one in two workers were long-term unemployed.

In February, the activity rate stood at 62.5% for the third consecutive month, and the employment-population ratio barely changed, standing at 60.1%.

There was no significant variation throughout the year.

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