The U.S. economy lost 92,000 jobs in February and the unemployment rate rose to 4.4 percent, the Labor Department said Friday.
Economists had forecast the economy would add 50,000 jobs and a steady unemployment rate at 4.3 percent. The prior month’s employment gain was adjusted down to 126,000 from 130,000.
The labor market in the U.S. has experienced a significant shift away from dependence on an immigration-driven workforce. Jobs numbers that may seem anemic compared with recent years may actually indicate healthy—even robust—growth under current conditions, according to economists.
Many economists now estimate the so-called “break-even” rate of job growth—the rate required to keep unemployment from rising—may be as low as 30,000 and could hit zero later this year. By contrast, when immigration was running at higher levels from 2021 through 2024, the economy needed to add more than 100,000 jobs monthly to keep pace with labor-force growth.
Retirements are also driving down the growth of the labor force, as an increasing number of members of the large baby boom generation leaves work and later, smaller generations fail to fully replace them. Last year, job growth was held back by the Trump administration’s focus on shrinking government payrolls, part of its program to “reprivatize” the U.S. economy.
U.S. productivity growth has accelerated, indicating that America is producing more despite a slowdown in hiring. In the fourth quarter, nonfarm business productivity—output per hour worked—rose at an annual rate of 2.8 percent. That followed an upward revision showing productivity grew at a 5.2 percent rate in the third quarter. Revisions to prior estimates show that, over the current business cycle beginning in the fourth quarter of 2019, nonfarm business productivity has grown at a 2.2 percent annualized rate—faster than the 1.5 percent pace of the 2007 through 2019 business cycle. The recent pace is roughly in line with the long-run historical average going back to the post-World War II era.
The estimate for December was revised down by 65,000, from a gain of 48,000 to a loss of 17,000. Combined with the downward revision for January, employment in the months prior to February was 69,000 lower.
Jobs figures can be volatile month to month. Many economists look to the three-month average for a view on the underlying strength of the labor market. On average, the economy has added just 5,667 jobs since December.
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