In the meantime, some positions cannot be filled again immediately.
(Photo: dpa)
Washington The US labor market is heading towards full employment ahead of the approaching turnaround in interest rates. In February, 678,000 new jobs were created, far more than expected. Economists polled by Reuters had expected 400,000. The separate unemployment rate fell to 3.8 percent, according to figures released by the government on Friday. This is the lowest level since February 2020 – the time before the corona crisis brought mass unemployment to the United States.
In view of the hot job market and high inflation, US Federal Reserve Chairman Jerome Powell has signaled a turnaround in interest rates for the middle of the month and further hikes in the current year. The US monetary authority Charles Evans warned now not to overdo it with tightening steps. It would be beyond what is necessary to raise interest rates at every meeting this year, the Chicago Fed District Chair told CNBC.
After the labor market data, expectations on the futures markets remained that the central bank would leave it at a rate hike of a quarter of a percentage point on March 16th. The probability of this is estimated at 95 percent.
Powell had also spoken out in favor of such a step in Congress, but in principle did not rule out more extensive increases at one or more sessions. The Fed, which is supposed to ensure stable prices and full employment, is currently keeping the key rate in the range of zero to 0.25 percent.
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“The uncertainties caused by the Ukraine war mean that the Fed is starting with a ‘small’ step and not with the increase of 50 basis points that some had previously expected,” says economist Christoph Balz from Commerzbank. However, the tight labor market and high inflationary pressure speak in favor of a whole series of interest rate hikes.
Powell also explicitly described the situation on the labor market as tense when he appeared in Parliament. Employers have trouble filling vacancies. At the same time, wages rose more than they had in years. However, hourly wages stagnated in February compared to the previous month. “The labor shortage that prevailed in some sectors did not result in rising wages overall,” explained NordLB analyst Bernd Krampen.
According to VP Bank chief economist Thomas Gitzel, the job creation will continue in the coming months. The state support that flowed lavishly during the corona pandemic has now been used up in many households. Now there is again the material obligation to take up work: “The labor market report is just a side note for the upcoming interest rate meeting. The Fed has long since charted its course.”
More: USA: Service providers are growing more slowly – industrial orders are increasing strongly.