Economic Growth Exceeded Estimates in February With 678,000 Jobs Created

In February, the economy added 678,000 jobs, exceeding estimates and indicating a return to pre-pandemic levels. 

The unemployment rate fell to 3.8 percent on Friday, the lowest since the pandemic began and near the half-century low. 

The omicron strain of the COVID-19 epidemic has not slowed job growth. Revisions for December and January added 92,000 jobs, implying employment growth averaged over 500,000 per month during the omicron boom. 

Open For Business

With dismal approval ratings and criticism from Republicans for his management of the country’s economy, President Biden can now claim credit for other positive job reports.

In February, the recreation and hospitality industries, heavily hit by the pandemic shutdowns, added 179,000 jobs.

“This tells me the US market is open for business,” said Morning Consult’s head economist, John Leer. “Omicron is history, and firms predict solid demand moving forward.” 

The unemployment rate implies a tight labor market.

It has declined from a peak of 14.7 percent during the epidemic. The unemployment rate fell practically every month for two years and is currently just over the pre-global health crisis low of 3.5 percent.

Beginning in mid-January, the number of new cases peaked at around 800,000. The daily average is now just over 50,000, down 56% from two weeks ago.

During the same time span, hospitalizations and deaths decreased by 43% and 21%, respectively. For many, the coronavirus appears to be history.

Unlike his joint message to Congress last year, which featured social alienation and masks, Biden delivered his first State of the Union on Tuesday. A nearly uncovered audience greeted Biden this year. 

Inflation in the United States

However, inflation continues to afflict the Biden administration. Inflation climbed 7.5% in the year ending on January 1, the quickest in four decades and a half percentage point more than in December.

This month, the Federal Reserve will raise interest rates to their highest benchmark in years. While the first rate hike is projected to be a quarter-point increase, Federal Reserve Chairman Jerome Powell has not ruled out half-point increases later this year. 

On Wednesday and Thursday, Powell fielded questions from Congress regarding the Fed’s interest rate hike plans, as well as the impact of Russia’s invasion of Ukraine on the rate hikes and US economy.

Powell noted despite the uncertainty in Europe, the Fed would continue to tighten monetary policy.

As of Wednesday, the chairman warned, “the near-term economic implications of Russia’s invasion of Ukraine remain highly uncertain.

Creating an adequate monetary policy in this climate means accepting unforeseen economic changes. We will need to react quickly to new data and changing forecasts.”

After the announcement, Chicago Fed President Charles Evans stated on CNBC that job figures have been solid for some time.

“Today’s labor report is positive. Regarding the Fed’s plans to start tightening, Evans said it doesn’t matter that Chairman Powell was prepositioning the Fed for it the other day.