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Total nonfarm payroll employment rose by 311,000 in February, according to the latest jobs report from the U.S. Bureau of Labor Statistics (BLS). Job growth was notable in leisure and hospitality (+105,000), retail trade (+50,000), government (+46,000), and health care (+44,000), while employment declined in information (-25,000), in transportation (-25,000), and warehousing (-21,500).

“Today’s stronger than expected jobs report ‘should’ have meant that mortgage rates rose following an increase in the 10-year Treasury, and it would have all but guaranteed a 50-basis-point increase in the Federal Funds Rate later this month. Instead, the report was met with the news of the bank run at Silicon Valley Bank, which has pushed 10-year yields down and will likely result in a more conservative Fed,” Zonda chief economist Ali Wolf says.

In terms of the unemployment rate, Fannie Mae chief economist Doug Duncan says, “In the household survey, the unemployment rate rose by 0.2 percentage points in February to 3.6%; however, this increase was a product of the number of people joining the labor force last month exceeding the number who found jobs, as the household employment level still rose by 177,000.

"Labor force participation rose by 0.1 percentage point, the third consecutive month of increase, as workers continue to return from the sidelines. The prime age (25-54) participation rate is now back to the pre-pandemic rate.”

The number of unemployed persons rose to 5.9 million in February, compared to 5.7 million in January. The number of long-term unemployed—those jobless for 27 weeks or more—at 1.1 million, changed little in February and accounted for 17.6% of the total unemployed.

“We note a divergence in wage growth this month, with wages for all employees growing by 0.2% in February, but wages of production and nonsupervisory employees growing by 0.5%. Over the last 12 months, wages have grown by 4.6%, slightly faster than last month, indicating that the labor market is still exerting some inflationary pressure in the economy. Additionally, the total number of people working part time fell last month, though the number working part time but who would prefer full time was essentially unchanged,” adds Duncan.

The employment-population ratio held at 60.2% in February, and the labor force participation rate was little changed at 62.5%, compared with 62.4% in January. These measures have shown little net change since early 2022 and remain below their pre-pandemic February 2020 levels, the BLS states.

The number of persons not in the labor force who currently want a job was 5.1 million in February, lower than January’s 5.3 million. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.

Additionally, among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force—these individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the survey—was little changed at 1.4 million in February. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little at 363,000.

Residential construction employment jumped by 12,400, the largest increase since May, according to Duncan.