President Joe Biden said Friday's February jobs report shows that his administration's "economic plan is working." Photo by Bonnie Cash/UPI | License Photo
March 10 (UPI) -- U.S. data showed Friday that more than 300,000 people were added to the workforce last month, adding further support to expectations of a higher rate hike from the U.S. Federal Reserve.
The Bureau of Labor Statistics reported non-farm payrolls increased by 311,000 in February, higher than early week data from private payroll processor ADP showing 240,000 people were hired last month.
Gains were widespread across the leisure and hospitality sector, retail trade, healthcare and government.
While both the number of those still without a job and the overall rate of unemployment increased last month, both are relatively unchanged from the start of the year, the government's report showed.
Speaking Friday, President Joe Biden said millions more Americans are enjoying the dignity of a job and a paycheck.
"It's no accident." the president said. "Our economic plan is working"
Biden said there was no economic recovery under way when he took office.
There were 268,000 jobs removed from the U.S. economy in December 2020, the month before he took office. Much of the pitfalls in the past can be attributed to the lackluster economic growth experienced during the worst of the COVID-19 pandemic.
The president also noted that "people are moving back into the workforce."
"This may be the part that pleases me the most about the report," he said.
Swift recovery from the post-vaccination stage of the pandemic, however, meant demand outstripped supplies and inflation remains high.
Biden himself acknowledged there may be setbacks along the way to a more moderate level of consumer inflation.
That should only add further support to the sentiment that the U.S. Federal Reserve will increase its key lending rate by 50 basis points, or 0.5 percentage point, double the rate of its first rate hike for the year.
Federal Reserve Chair Jerome Powell testified this week before both the House and Senate, saying the economy was still performing well against lingering inflationary pressures and higher lending rates, which make everything from homes to cars more expensive.
Testifying before the Senate Banking Committee, Powell said that "economic data have come in stronger than expected" so far this year. Inflation is running three times as high as the Fed's target rate of 2%, suggesting policymakers still have work to do to slow the economy.
After eight successive rate hikes, U.S. Sen. Elizabeth Warren, D-Mass, the chair of the Senate Subcommittee on Economic Policy, said Fed policies were designed to "slow the economy and throw people out of work."
Widespread layoffs, coupled with lackluster growth and spending, would be a sure sign of a recession. So far, however, that has not been the case. APD data showed only 106,000 were added to private-sector payrolls in January.
Nevertheless, James Knightly, the chief international economist for ING, said there were some dark clouds brewing.
"Virtually all of the jobs created on balance over the past 11 months have been part-time, which isn't a sign of strength," he said.
Markets were modestly lower on the news. The Dow was down 0.3%, the S&P 500 was down 0.6% and the tech-heavy NASDAQ was down 0.8% as of 9:45 a.m. EST.