Employment rose by 678,000 in February, the U.S. Bureau of Labor Statistics reported Friday, although the number of accounting and bookkeeping jobs declined by 800.
The total number was well above analyst expectations and the unemployment rate dipped two-tenths of a point to 3.8%. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, health care, and construction. Professional and business services added 95,000 jobs in February, and employment in financial activities rose by 35,000.
In addition, the BLS upwardly revised the December and January job numbers, with December revised up by 78,000, from a gain of 510,000 to 588,000 jobs, and January revised up by 14,000, from 467,000 to 481,000 jobs. With both revisions, employment in December and January combined was 92,000 higher than previously reported by the Labor Department. Average hourly earnings rose only a penny to $31.58 in February, after much bigger increases in recent months. Over the past 12 months, average hourly earnings have increased 5.1%.
Andrew Harrer/Bloomberg
The White House praised the latest job numbers. “Today’s report shows that my plan to build an economy from the bottom up and the middle out is working to get America back to work,” said President Biden in a statement. “Since I took office, the economy has created 7.4 million jobs. That’s 7.4 million jobs providing families with dignity and a little more breathing room. We are building a better America.”
The Biden administration is still hoping to get some part of its Build Back Better plan passed in Congress, but it remains stalled in the evenly divided Senate where moderate Democrats Joe Manchin of West Virginia and Kyrsten Sinema of Arizona still object to some of the tax provisions, and Republicans remain uniformly opposed. Following Biden’s State of the Union address on Tuesday night, Manchin indicated willingness to advance some parts of the plan, including raising taxes on upper-income individuals and corporations, according to Bloomberg News, although Sinema has opposed tax increases.
The war in Ukraine, and surging inflation, could put a damper on job growth in the months ahead. “February’s jobs report is further proof that with emergency COVID jobless benefits ending, Americans are reconnecting to work,” said Rep.Kevin Brady, R-Texas, the top Republican on the tax-writing House Ways and Means Committee. “But there are real red flags looming, including a large drop in real wages for workers, a wage-price spiral driving inflation higher, and a growing consensus among economists that a recession this year is more likely than not. President Biden offered no real solutions to any of this in his State of the Union remarks. In fact, his obsession with Build Back Better — which is dead — will only make inflation worse and do little to stave off a crippling wage-price spiral.”
Top 100 Firm CBIZ released its monthly CBIZ Small Business Employment Index on Friday, showing a seasonally adjusted decrease in jobs of 0.09% in February among the 3,600 small businesses tracked by the index, after larger declines in January. Hiring was especially depressed in the Northeast (down 0.76%) and Central (down 0.38%) regions. The West (up 0.97%) and Southeast (up 0.72%) both experienced small increases. The biggest hiring increases were seen in administration and support services, insurance, and technology and life sciences. Staffing reductions were seen in information, real estate, and professional services.
“The month of February has historically seen flat hiring trends, so this is an overall positive sign as ‘The Great Reshuffle’ among employers and job candidates abates,” said Philip Noftsinger, vice president finance and corporate controller at CBIZ in a statement. “Small businesses face new challenges on the heels of the labor market concerns, and rising inflation will be a headwind for the economy further influencing hiring trends.”