U.S. job gains accelerate while wage growth slows sharply

U.S. hiring boomed in February while wage growth slowed, showing a robust labour market that likely keeps the Fed on track to raise interest rates this month.

U.S. hiring boomed in February while wage growth slowed, showing a robust labor market that likely keeps the Federal Reserve on track to raise interest rates this month and offering some respite from strong inflationary pressures.

Nonfarm payrolls increased 678,000 last month -- the most since July -- after upward revisions in the prior two months, a Labor Department report showed Friday. The advance was broad-based across sectors. The unemployment rate edged down to 3.8 per cent, and average hourly earnings were little changed from the prior month.

The median estimate in a Bloomberg survey of economists called for a 423,000 advance in payrolls and for the unemployment rate to fall to 3.9 per cent.

While a Fed rate hike later this month was a foregone conclusion before the payrolls data, the report reinforced recent central bankers’ assessment that the labor market is extremely strong. Employers have added at least 400,000 jobs each month since May against the backdrop of a rapid bounceback of the economy.

“If the recovery can keep up its current tempo, several key indicators of labor market health will hit pre-pandemic levels this summer,” Nick Bunker, economic research director at Indeed Inc., said in a note.