The Bureau of Labor Statistics (BLS) released its monthly Current Employment Statistics (CES) report and Current Population Survey (CPS) for February 2022 on Friday, March 4th. The monthly change in employment given by the CES and the unemployment rate from the CPS are seen as the standard gauges for assessing the health of the U.S. labor market.
Employment in the U.S. rose by 678,000 jobs. The jobs report exceeded the Geographic Solutions, Inc. forecast of 507,000 but is much more in line with the actual results than the last several volatile months (which also included volatile revisions to previous reports). The Geographic Solutions, Inc. forecast outperformed the Wall Street Journal estimate of 440,000 new jobs. The Geographic Solutions, Inc. forecast was derived from internal data on the number of job searchers, job applications, job severances, and applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).
The unemployment rate fell to 3.8%, below the Geographic Solutions and WSJ forecasts of 3.9%. The unemployment rate forecast used internal data on the number of job openings, job searchers, job applications, job severances, and the number of applications for unemployment benefits filed on Geographic Solutions state client sites. The forecast uses unemployment claims data from the USDOL.
Job creation was strongest in Leisure & Hospitality (179,000). Education & Health Services (112,000) and Professional & Business services (103,000) also had strong showings for the month. Every major industry saw job increases in February.
Professional & Business Services; Trade, Transportation, & Utilities; and Financial Activities are above their pre-pandemic highs with construction poised to meet its pre-pandemic level next month.
The labor force participation rate increased to 62.3% from the previous month. The more expansive U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job. This measure of unemployment ticked up to 7.2%. A growing labor force participation rate along with strong job growth indicate that the labor market is on a strong trajectory.
The February employment figures built upon the encouraging performance in the jobs market since October of last year. While the labor market has shown resiliency during the Omicron variant, its gradual alleviation has provided an extra boost for job increases not seen since before the Delta variant took full effect last summer. However, some potential hurdles remain. The Federal Reserve will begin its path of interest rate increases in March to combat the high rates of inflation that have emerged over the last year. With inflation a top concern among consumers, there is also the worry that the Russian invasion of Ukraine will send energy prices soaring. These developments will need to be watched closely going forward, but February overall was a positive month in the U.S. labor market.