February jobs report could lessen next rate hike, says NAFCU Chief Economist
The Bureau of Labor Statistics (BLS) issued the latest jobs report Friday, which revealed that the unemployment rate rose to 3.6 percent in February. NAFCU Chief Economist and Vice President of Research Curt Long noted the report “was a positive one overall.”
“Although the unemployment rate rose, job gains were strong and labor force participation grew signaling Main Street’s optimism in hiring,” Long said. "The bigger news was the lowest month-over-month gain in average hourly wages in a year," added Long. "That result, paired with a downtick in average hours worked, throws some doubt into the FOMC’s March decision. Although a 50-basis point hike is still on the table, this report is more supportive of a quarter-point increase."
Long sat down with CUBroadcast host Mike Lawson to discuss the latest figures noting that the labor force participation rate ticked up in February marking the "third straight month participation has improved and is back to the highest point it's been since March 2020."
Of note, Long provided additional insights into the report in a new NAFCU Macro Data Flash report. Non-farm payrolls increased 311,000 last month. In addition, January payrolls were revised down 13,000, while December saw a -21,000 revision.
Results among major private sector industries were mostly mixed. The biggest winner was leisure and hospitality (+105,000), followed by education and health (+74,000), and retail trade (+50,000). Industries that lost jobs were the information sector (-25,000) and transportation and warehousing (-22,000).
The labor force participation rate rose 0.1 percent and the average hourly earnings grew 8 cents in February
Of note, Federal Reserve Chairman Jerome Powell testified before Congress last week and reiterated the Fed’s commitment to returning inflation to its 2 percent goal, while promoting maximum employment and stable prices. Long said Powell’s “hawkish” testimony to the Senate Banking Committee indicated “a 50-basis point hike in March…became the odds-on outcome.”
For more economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.
Add to Calendar 2023-11-28 09:00:00 2023-11-28 09:00:00 Growing Creatively & Innovatively in 2024 Listen On: Key Takeaways: [0:58] What can credit unions do to best prepare themselves for 2024? [2:12] Although he sees a glimmer of hope, Jack points out that the liquidity crisis and slow prepayment speeds hamper rapid recovery. [5:22] We discuss how credit unions seek low loan growth through member-centric strategies such as second mortgages and home improvement lending. [7:34] Credit unions are leveraging advancing technology for member-focused engagement. [9:31] How will technology continue to evolve and affect credit unions? [11:43] What role does AI play in innovative growth? [14:14] Credit unions adopt technology for efficiency, enabling staff to focus on personalized member interactions, especially with younger generations. [17:14] Closing thoughts, emphasizing competition against banks and fintech for younger generations. Web NAFCU email@example.com America/New_York public
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