'Why Worry? ¯\_(ツ)_/¯': Economists React To February Jobs Report On Twitter

Nonfarm payroll employment rose by 311,000 jobs in February, more than the consensus estimate, the Bureau of Labor Statistics reported Friday.

The unemployment rate rose to 3.6%. It has remained at or below 3.7% since the end of the first quarter of 2022.

Leisure and hospitality added 105,000 jobs in February, 70,000 of which were at food services and drinking places. The sector has averaged 91,000 monthly job gains over the last six months and is now short of its pre-pandemic February 2020 employment level by 410,000 jobs. 

Retail trade employment rose by 50,000 jobs in February, and construction jobs grew by 24,000. The construction industry has averaged monthly gains of 20,000 jobs in the past six months. 

Here's how economists and others reacted to the February jobs report on Twitter:

Holy smokes, another huge jobs report.

Payrolls grew +311k, well above consensus of +225k.

Unemployment edged up a tad to 3.6 percent, mainly due to rising labor force participation.

Revisions slightly negative (-13k for Jan; -21k for Dec), but overall the economy is MOTORING.

— Justin Wolfers (@JustinWolfers) March 10, 2023

Strong hiring across the board in February, except for warehouse & IT:

Hospitality +105,000
Retail +50,000
Gov't +46,000 (K12 educ. +23k)
Biz +45,000
Healthcare +44,000
Construction +24,000
Social assistance +19,000

**Transport/warehouse -22,500**
**IT was down -25,000 jobs**

— Heather Long (@byHeatherLong) March 10, 2023

What's driving the construction labor market resiliency even amidst a severe housing market slowdown? Several factors. @dietz_econ explains it well in his tweet linked below. (9/n)https://t.co/4eEpQnDtDX

— Odeta Kushi (@odetakushi) March 10, 2023

Labor force participation has risen slowly, but steadily from 62.2 in November to 62.5 in February. That amounts to nearly 2 million more people in the labor force since November.

This is a labor supply recovery in progress.

— Betsey Stevenson (@BetseyStevenson) March 10, 2023

The average hourly earnings number looks quite constructive on the inflation front. +0.2% month-on-month.

Over the last three months, it annualizes to 3.6%, the lowest in this cycle (that figure was 4.9% in the last three months of '22).

— Neil Irwin (@Neil_Irwin) March 10, 2023

This poses a difficult question for the Fed, will it hike rates to slow the economy simply because it sees it as growing too fast, even as inflationary pressures are dissipating?

— Dean Baker (@DeanBaker13) March 10, 2023

There's a lot here the Fed wants to see: Labor force participation is bouncing back, and wage growth is moderating. It'll obviously going to worry about the gangbusters job growth, but if it's not causing nominal wage pressures, why worry? ¯\_(ツ)_/¯https://t.co/TvbtQycvaa

— Justin Wolfers (@JustinWolfers) March 10, 2023

Labor supply cools off wage growth pressures and increases output which reduces inflationary pressures. Every time you revise up your estimate of labor supply, as most should be doing, think of it as reducing the need for rate hikes

— Adam Ozimek (@ModeledBehavior) March 10, 2023

For months, we've been asking where are the workers?

Well...the prime-age workforce (ages 25 to 54) is now back to its pre-pandemic level.

This is encouraging. It means we might be able to cool off the job market without needing to lay a ton of people off. https://t.co/rsjwChgY21

— Heather Long (@byHeatherLong) March 10, 2023

Folks, over the period of slowing nominal wage growth of the last year, the labor market has added 362,000 jobs per month on avg, and the unemployment rate is down to near 50-yr lows. It looks like the economy can have a soft landing, if the Fed doesn’t stand in the way. 4/

— Heidi Shierholz (@hshierholz) March 10, 2023

This is a good jobs report consistent with a soft landing.

Higher payrolls but slower nominal income growth ->
Comparatively more production but comparatively fewer dollars chasing it ->
Lower inflation without unpleasantness.

— Alan Cole (@AlanMCole) March 10, 2023

Phew…the February jobs report was all-in-all a good one. Yes, the 311k job gain is still too strong, but hours worked declined, and labor supply is also strong, thus the increase in labor force participation and the unemployment rate. And wage growth is moderating.

— Mark Zandi (@Markzandi) March 10, 2023

Key takeaways:
-Report was solid overall: hot-ish job gains, cooling wage growth
-Unemp rose but married with very nice milestones in LFP, hitting pre-pandemic levels or even better.
-Jan was a bit of a fluke, but the labor market is still strong#JobsReport 14/14

— Daniel Zhao (@DanielBZhao) March 10, 2023

though, naturally, a high chance that the next CPI number dampens sentiment again

— talmon joseph smith (@talmonsmith) March 10, 2023