February 2022 Jobs Report

ON THE FEBRUARY JOBS REPORT

The United States labor market continued to power ahead in February 2022, with the Bureau of Labor Statistics reporting that the United States economy added 678,000 jobs in the month. This is represents pickup from the already strong gains in December and January, and roughly in line with the sharp increases in November.  The recovery really gained steam in the fall of 2021, with the tailing off of the COVID-19 Delta wave and the expiration of federal pandemic supports which had been limiting supply. The unemployment rate is now back to 3.8%, only 0.3 percentage points above its pre-pandemic low. All other labor market indicators, from continued high levels of job openings to record low initial unemployment claims, support the picture of a historically tight labor market.

All employment reports are a look in the rearview mirror, reflecting past conditions. That is no less the case now, with the turmoil from Russia’s invasion of Ukraine roiling world markets, with the impact of the invasion and the global sanctions in response still mostly yet to be felt. These shocks will continue to strain supply chains and increase price pressures. Domestically, the Federal Reserve has now committed to raise its target interest rate by 25 basis points this month to slow inflation, with further and possibly more aggressive rate hikes looming in future months.

This jobs report shows that the US economy entered this period of increased uncertainty in strong shape. While growth may cool to some degree in coming months, the robust recovery is likely to continue.

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Noah Williams is an adjunct fellow at the Manhattan Institute and the Juli Plant Grainger Professor of Economics and director of the Center for Research on the Wisconsin Economy at the University of Wisconsin–Madison.