US Adds 678000 Jobs in February, Causing Unemployment Rate To Drop

In February, the U.S. economy added 678,000 jobs, surpassing forecasts and bringing the unemployment rate down, but with the exception of Black women.

The increase has caused February to be the best month for job growth since last July and comes as the country still has 2.1 million jobs to go before hitting the February 2020 level. The President at the Economic Policy Institute, Heidi Shierholz, wrote on a Twitter post that the incident was a "mind-bogglingly fast and sustained growth."

Drop in Unemployment Rate

She said that there were more than half a million jobs added per month on average for more than a year. Shierholz added that nine out of every 10 jobs lost during the coronavirus pandemic recession have now been regained.

However, the consensus prediction for the report, 400,000 jobs, missed the mark, with erratic swings being observed in the labor market from one month to another. The situation has made the job of forecasters much more difficult during the pandemic, as per CNN.

Despite the unemployment rate in the country dropping, the same could not be said for Black women, who have been disproportionately affected during the coronavirus pandemic. The report showed that the overall unemployment rate went from 4% in January to 3.8% last month.

An economist at John Jay College, Michelle Holder, who is also the president of the Washington Center for Equitable Growth, said that in the aggregate it was a generally positive report that had troubling signs. In contrast, the unemployment rate for Black women went from 5.8% in January to 6.1% in February.

According to CNBC, Black women were the only race and gender group that experienced an uptick in the unemployment rate. Their labor force participation rate also decreased by 0.2% last month, which is a number that economists use to gauge engagement with optimism in the labor market.

BlackRock's chief investment officer of fixed income, Rick Rieder, has called the recent downturn of the unemployment rate the most fertile employment market in a generation. He said that despite the coronavirus pandemic and its effects on supply chains many corporations were moving forward and bringing in more workers at an ever-increasing cost.

Economic Recovery

U.S. Labor Secretary Marty Walsh said in an interview that the situation was a very good economic recovery that President Joe Biden was leading. He said that financial experts will say that aside from inflation the United States now has a very powerful economy.

However, markets tanked as traders fretted about the Federal Reserve is behind the curve on the inflation fighting front. On Friday, the Dow Jones Industrial Average dropped by nearly 500 points in the afternoon.

This week, Fed Chairman Jerome Powell strongly suggested a 25-basis point rate hike at the meeting later this month. However, some experts are wondering whether the Fed needs to be more aggressive on rate increases with the developing situation between Russia and Ukraine.

On the other hand, Rieder thinks that Powell & Co. should tread carefully on rate hikes and be careful not to disturb the fertile jobs markets in the United States. He added that data showed higher wages and improved benefits, Yahoo Finance reported.