Saturday, March 11, 2023

US job growth keeps rolling along in February

It was another "Jobs Friday" yesterday, this time for February. And the US jobs market continues to be in a very good place.

So this might be the first indication of all of the reported tech layoffs appearing in the jobs reports. Also note that services continue to see jobs come back (especially in hospitality sectors), and even retail recovered after losing jobs through much of 2022.

February is also a good month to look at for another reason, because February 2020 is when employment peaked before the COVID-related shutdowns and adjustments. We exceeded that February 2020 peak last June, and are now up by nearly 3 million jobs (and 3.355 million in the private sector).

Even the increase in unemployment happened for the "good reason" - more Americans entered the work force, and about half of them got jobs.

But the overall employment-population ratio is down by nearly a full point compared to February 2020, which is indicative of the demographic challenges and post-COVID changes that have happened in this country. So we really don't have a large number of prime-age workers on the sidelines, but we do have more people to serve with less people available to do so.

That could be a good thing for workers, because it may make it more difficult to lay people off and/or have them suffer through longer lengths of unemployment, because the demands remain with fewer workers available to replace and/or compete for open positions.

But hourly wage growth also moderated (+0.24%), and really isn't causing any type of wage-price spiral. Combine it with the best job growth in decades, and it's something that both central bankers and workers should be happy about.

As I've said before, why would we keep jacking up rates to stop what seems to be a great economic situation? In February 2023, it looks like we continued to have strong job growth, good wage growth, and nothing to stop inflation from continuing to drift down from its highs in June. Let's take it and keep on rolling.

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