Wage Growth Slowed and Hiring Was on a Tear in February

In a second straight better-than-expected month for jobs, U.S. employers added 678,000 hires to their payrolls in February, the Bureau of Labor Statistics reported March 4. Analysts had expected gains of around 440,000 jobs.

The unemployment rate fell 0.2 percentage points to 3.8% in the month—another step closer to the 3.5% rate recorded in February 2020, the last pre-pandemic month. 

Retailers added nearly 37,000 jobs in February, with the biggest numerical gains going to home and garden supply stores and department stores. Grocers added 4,400 jobs in the month, while general-merchandise stores, including warehouse clubs and supercenters, gave up 10,000 jobs. That's a flipping of the script from January, when grocers saw job losses while superstores recorded gains. February also was grocers' first month of overall job growth since November.

Restaurants and bars, again, were a big winner in February's jobs report, adding 123,700 hires during the month after adding more than 108,000 in January.

Wage growth slowed last month, with overall hourly earnings climbing just 1 cent in February (for all workers on private, nonfarm payrolls) after jumping 23 cents in January. For the past 12 months, wages were up 5.1%—that compares with a 5.7% year-over-year acceleration recorded in January. 

For production/nonsupervisory workers, wages rose 8 cents in February, after climbing 17 cents in January.

Overall, year-over-year wage gains the past two months didn't keep pace with retail price inflation: Consumer prices in January were up 7.5% year over year (including a 7.4% spike in grocery prices), the BLS reported Feb. 10. The BLS's report on consumer prices in February is scheduled to be released March 10.