The unemployment rate remains low even though it climbed to 3.6%, after falling in January to 3.4%, its lowest level since 1969, the Labor Department said on Friday.

Some 311,000 jobs have been created, compared to 504,000 in January, when only 205,000 were expected, according to the consensus of Briefing.com.

Leisure and hospitality, retail, government and health care sectors were job providers, the Labor Department said, but employment fell in information, transportation and warehousing.

"The data shows that the labor market remains strong," commented Rubeela Farooqi, chief economist at HFE.

“But a rising unemployment rate and weaker wage growth suggest conditions are adjusting,” she added.

These data will weigh heavily in the balance of the American central bank (Fed), which meets on March 21 and 22, and is worried about the still very high inflation.

At stake: a rise in the key interest rate that may be stronger than expected, which will drive up interest rates on bank loans and further reduce household purchasing power.

Return of workers

US employers have been dealing with a labor shortage for about two years, which has contributed to rising prices.

However, the participation rate continued to rise in February, helping to push up the unemployment rate but signaling the return of workers to the job market.

"Labour force participation rates for adult men and women have surpassed their pre-pandemic peaks," Treasury Secretary Janet Yellen said in a House of Representatives committee interview Friday morning.

"When a larger number of people enter the labor market, this eases the conditions" and helps "to remedy the imbalance of supply and demand in the labor market", added the Minister of the Economy and Finance by Joe Biden.

President Biden will also comment on these numbers from the White House at 10:45 a.m. (5:45 p.m. GMT).

Seeing prices stop soaring presupposes slowing down consumption and therefore economic activity, which is generally accompanied by a rise in unemployment.

However, so far, the successive increases in the key rate to increase the cost of credit decided by the Fed have had little effect on the economy.

Dismissals

“If all the data” on employment, inflation, consumption, in particular, “should indicate that a faster tightening was justified, we would be ready to accelerate the pace of rate hikes”, declared Tuesday the Fed Chairman Jerome Powell before a Senate committee.

He had, however, considered "possible to bring inflation down to 2%, with less significant effects on the labor market" than during previous periods of economic slowdown.

Private sector employment figures, the monthly ADP/Stanford Lab survey released on Wednesday, showed a continued robust level of hiring last month.

“The slight slowdown in wage growth, on its own, should not be able to bring down inflation quickly in the short term,” commented Nela Richardson, chief economist at ADP.

US employers, however, cut 77,770 jobs in February, their highest number for that month since 2009, then in the midst of the subprime mortgage crisis, according to a study by consulting firm Challenger, Gray & Christmas, published Thursday.

Employers "expect a turnaround (of the American economy, editor's note) and are lowering their spending everywhere", estimated the vice-president of the cabinet, Andrew Challenger, quoted in a press release.

The tech sector, in particular, has multiplied the announcements of layoffs.

But that's only a small proportion of the US payroll.

Retail and finance are also affected.

© 2023 AFP