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U.S. employers added more jobs in February than expected, but unemployment inched up

AILSA CHANG, HOST:

The U.S. job market continues to outperform expectations. Today we learned that employers added 275,000 jobs last month, a lot more than forecasters had expected. But the good news was tempered by some mixed signals in that same report. NPR's Scott Horsley has been digging through the details and joins us now. Hey, Scott.

SCOTT HORSLEY, BYLINE: Hi, Ailsa.

CHANG: OK. So what is the big takeaway from this Labor Department report today?

HORSLEY: Well, the big takeaway is we still have a job market that's very solid, although revised figures do show hiring was not quite as strong in December and January as initially reported. That's a good reminder that these numbers can bounce around from month to month. In February, we saw hiring in lots of different industries - retail, restaurants, health care, construction. But we're not seeing the kind of mad scramble for workers we once were. Economist Julia Coronado, who heads MacroPolicy Perspective, says the job market is still plenty warm but is not in danger of boiling over and rekindling inflation. And she says that's just what the Federal Reserve wants to see.

JULIA CORONADO: This is kind of a Goldilocks report for the Fed. Job gains are solid, but there's no evidence that this is, like, an inflationary labor market, in fact. To quote President Biden last night, "the landing is and will be soft" (laughter). This is a soft landing report.

HORSLEY: The president touted the strength of the labor market in his State of the Union address last night. Biden noted that U.S. employers have added almost 15 million jobs since he came into office. That is more than twice as many as were added during the first three years of the Trump administration.

CHANG: Well, the unemployment rate - I mean, it did inch up a bit in February, right? What's happening there?

HORSLEY: Yeah. The unemployment rate rose to 3.9% - still very low by historical standards. It's been under 4% now for 25 straight months. One reason unemployment ticked up is there are more people in the workforce, and Coronado thinks that's partly thanks to the option of working from home. Almost 23% of employees worked remotely at least part of the time last month. That's up from the year before and more than double the share of remote workers before the pandemic. Coronado says that's opening doors for a lot of workers, including parents, who otherwise might be on the sidelines.

CORONADO: Employers have had to embrace the arrangement. Some have done it more proactively than others, but there clearly is a demand and a desire by qualified workers for that kind of arrangement. And so if they want certain workers, they're going to provide them that kind of flexibility.

HORSLEY: The job market has also benefited from an influx of foreign-born workers. The number of workers in the U.S. who were born elsewhere jumped by 5.5% over the last year, while the number of native-born workers actually shrank.

CHANG: Well, if there are more workers available, is that pushing down wages?

HORSLEY: No. Wages are still going up, albeit not as fast as they were. Average wages in February were up 4.3% from a year ago. The good news is while wage growth has slowed down some, price hikes have slowed down even more. So pay has been climbing faster than prices for most of the last year now, and the average worker now has more buying power than he or she did back before the pandemic.

CHANG: That is NPR's Scott Horsley. Thank you so much, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.