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US economy exceeds expectations and adds 311,000 jobs

 (Getty Images)
(Getty Images)

The US economy exceeded expectations and added 311,000 jobs in February, which raises concerns that the Federal Reserve might continue to raise interest rates, according to the Bureau of Labor Statistics.

The number is larger than the 242,000 jobs that payroll processor ADP projected earlier this week.

At the same time, the US unemployment rate rose slightly to 3.6 per cent overall, with unemployment for Hispanic workers rising slightly to 5.3 per cent. Conversely, employment among adult men, white people, adult women, teenagers, Black people and Asians changed little.

At the same time, the unemployment numbers for December were revised down from 260,000 to 239,000 jobs and the numbers for January were revised down from adding 517,000 to just 504,000.

Labour force participation, which includes people who either have a job or are looking for a job, remained relatively the same at 62.5 per cent. The number remained below the 61.1 per cent participation from February 2020 before the Covid-19 pandemic.

President Joe Biden said the positive gains in new jobs added to the economy was “no accident” and surmised that they are proof that his economic plan is working during remarks from the Roosevelt Room of the White House on Friday.

“People who are staying out of the job market ... are now ... coming off the sidelines and getting back into the job market. The share of working age folks who are in the labor force is higher than it has been anytime since 2008,” he said.

Mr Biden added that the positive report “means more people with good jobs, and the dignity and security that comes with a paycheck” and said the US economy “is moving in the right direction”.

“Today's news tells us that thanks to our efforts, 12 million more Americans have jobs. A job is about a lot more than a paycheck ... it's about dignity. It's about your family's dignity and 12 million more Americans can look their kid and and say: ‘Honey, it's going to be okay,’ and mean it,” he said.

The numbers are simultaneously a boon to President Joe Biden, who will tout the increasing employment. But a hot labour market is also a cause for concern since the Federal Reserve worries that it could lead to more inflation and therefore want to raise interest rates.

During a Senate hearing this week, Senator Elizabeth Warren grilled Federal Reserve Chairman Jerome Powell about his raising of interest rates, which could reduce employment.

“We are taking the only measures we have to bring inflation down,” he said.

“And putting two million people out of work is just part of the cost, and they just have to bear it?” Ms Warren said in response. Mr Powell responded by saying working people would not be better off if the Federal Reserve let inflation persisted.

Specifically, Ms Warren noted how the Federal Reserve projected that unemployment could increase by one percent.

“We need a Fed that will fight for families and if you are not going to lead that charge, we need someone at the Fed who will,” she said.