US economy adds 275,000 jobs in February, unemployment rate ticks higher
The February jobs report showed employers continue to hire workers at a good clip likely leaving the Federal Reserve in a holding pattern when it comes to cutting interest rates.
U.S. employers added 275,000 jobs in February, higher than economist estimates of 200,000 and the average monthly gain of 255,000 recorded in 2023, the Labor Department reported on Friday. The unemployment rate ticked up to 3.9% compared to the 3.7% estimate. Still, the blockbuster 353,000 gain in January was revised down to 229,000.
Growth was driven by hiring of healthcare and government employees, along with food services. On the flip side, the manufacturing sector cut 4,000 positions.
Average hourly earnings, a key measure of inflation, increased 0.1% for the month and climbed 4.3% from the same time one year ago. Strong job growth combined with rising wages is fueling inflation, according to some economists.
NUMBER OF HIGH-PAYING JOBS IS DWINDLING
The data may not be enough for the Federal Reserve, which is looking for inflation and the economy to slow, to begin its rate-cutting cycle, which would also come heading into the 2024 presidential election.
Earlier this week, Fed Chairman Jerome Powell reiterated that stance during his annual testimony before Congress.
"The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%," he said in remarks prepared for testimony before the House Financial Services Committee.
Higher rates have consumers paying more for things such as auto loans and credit cards. As an example, the average percentage rate (APR) for credit cards is 24.61%, as tracked by Lending Tree.
LOWER INFLATION KEY TO FED CUTTING INTEREST RATES
CLICK HERE TO READ MORE ON FOX BUSINESS
Currently, the market is expecting the first rate cut to come in June, as tracked by the CME's FedWatch Tool.
FOX Business' Megan Henney contributed to this report.