The U.S. Federal Reserve received additional ammunition to raise rates as the economy added 678,000 jobs in February and the jobless rate fell to 3.8%. Revisions to December and January were also higher than expected.
The unemployment rate improved to its lowest level since February 2020, returning to pre-pandemic levels. The labour force participation rate unexpectedly ticked up to 62.3%, as more individuals returned to the work force.
A tight supply of workers boosted wages in February, though the growth in earnings slowed. Hourly pay has risen 5.1% over the past 12 months, with the average hourly earnings of private-sector workers rose a penny from last month. Wage growth has steadily grown for fourteen straight months.
There were broad gains across industries, with the hard-hit services sector posting a notable increase. Leisure and hospitality employers added back 179,000 jobs, and education and health services jobs rose. Transportation and warehousing job growth matched January's gains.
The jobs data is the final major labour report ahead of the Federal Reserve’s March meeting, where it is expected to raise interest rates.
