February jobs report shows US beat expectations adding 311,000 new jobs
The Labor Department releases the February jobs report which showed the US economy added 311,000 payrolls, blowing past expectations, unemployment edged up.
The US economy added a whopping 311,000 new jobs in February, far exceeding the 200,000 economists had predicted. Unemployment ticked up slightly from 3.4 percent to 3.6 percent last month.
Areas that had “notable job gains” according to the US Bureau of Labor Statistics were the leisure and hospitality, retail trade, government, and health care. The mass layoffs in the tech industry were noted by decreased employment in information sector. Transportation and warehousing also saw drops in employment last month.
Every month the agency publishes a report on the United States’ jobs market to track trends in employment across the country. The two key metrics to look out for are the number of nonfarm payroll jobs added and the updated unemployment rate.
When is the February jobs report released?
The Bureau of Labor Statistics compiles a monthly report detailing key data on the United States’ jobs market. This report, known as the Employment Situation, is normally released on the third Friday after the reference week (the week which includes the 12th day of the month).
This month, the January 2023 jobs report will be released at 8:30am (ET) on Friday, 10 March.
What are nonfarm payroll jobs?
If you have read the jobs report you will be familiar with the term ‘nonfarm payroll’ but you may be less sure of exactly what it means. The jobs report covers most types of employment but there are some exceptions.
The nonfarm payroll is a measure of the total number of workers, excluding those employed in farming, the military and private households, as well as those who are non-profit employees and proprietors. Because of the unique characteristics of these jobs they are not considered an accurate bell-weather for the jobs market as a whole.
The figures cited in the jobs report primarily relate to those employed in private and government entities. Roughly 80% of the US workforce is a part of the nonfarm payroll, meaning that the vast majority of workers are included in the jobs report’s figures.
How does the jobs report affect the Dow Jones?
While it may sound counter-intuitive, the markets are hoping for signs that the resilient US jobs market is starting to slow down. Economic growth was running very hot during 2022 and the Federal Reserve has implemented a series of interest rate hikes to cool things down.
Interest rate hikes can slow price rises by discouraging investment, but this mechanism is bad news for the markets. Indexes like the Dow Jones are therefore hoping for evidence that the US economy is slowing to allow the Fed to ease interest rate hikes.
While the jobs market maintains strong growth numbers, the Fed is unlikely to row back on any of the interest rate increases that have hurt investors.