February’s labor market continued to exceed expectations with the addition of 265,000 jobs in the private sector and 46,000 in the public sector. The unemployment rate increased to 3.6% as labor force growth outpaced hiring amid recession uncertainty, contributing to an overall tight labor market. Although declining to 10.82 million, job openings remain 57% above pre-pandemic levels. 3.9 million workers quit jobs in January, dipping below 4 million for the first time since May 2021.
As roughly 270,000 people re-entered the workforce, February’s labor force participation rate rose to 62.5% — an upturn potentially tied to growing recession fears and the Federal Reserve’s persistent inflation rate hikes. Despite declining to 6% in February, the Federal Reserve is expected to raise rates again on March 22.