Will US employers maintain strong hiring pace in February?

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US Employers Likely to Continue Robust Hiring in February Amidst Tight Labour Market

US employers are projected to have sustained a strong pace of hiring in February, further tightening labour market conditions and potentially seeing the unemployment rate resume its downward trend. This robust hiring activity is occurring even as a persistent shortage of workers continues to drive wage growth. Federal Reserve Chair Jerome Powell has characterised the labour market as "extremely tight," underscoring the current dynamics of high demand for labour.
Nonfarm Payrolls Expected to See Significant Increase

The Labour Department's upcoming employment report is anticipated to show an increase of approximately 400,000 jobs in February. While this figure represents a slight moderation from the 467,000 jobs added in January, it still indicates substantial job growth. Economists anticipate that by the end of this year, all jobs lost during the pandemic will be recouped, leaving employment only 2.5 million jobs below its pre-pandemic level.
Signs Point to Tightening Labour Market Conditions

Several indicators suggest a labour market operating near full capacity. The number of individuals receiving state unemployment benefits reached its lowest point in 52 years by mid-February. Furthermore, data from Homebase, a payroll scheduling company, indicated a notable rise in both the number of employees actively working and the hours they logged in mid-February. Workforce management software company UKG also reported that shift work in February saw its largest monthly increase since the spring of 2020.
Unemployment Rate Forecast to Decline, Wages to Rise

The unemployment rate is forecast to decrease to 3.9 per cent in February, down from 4.0 per cent in January. Concurrently, average hourly earnings are expected to climb by 0.5 per cent in February, continuing a trend of wage increases. This projected rise would push the year-on-year wage growth to 5.8 per cent from 5.7 per cent in January, reflecting the ongoing demand for workers. The average workweek is also expected to lengthen slightly to 34.6 hours from 34.5 hours.

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Will US employers maintain strong hiring pace in February?

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