U.S. Employment Skyrockets by 678,000 in February 2022

The U.S. labor market outperformed all forecasts in February 2022, adding 678,000 nonfarm jobs—up to 70% above the predicted range of 400,000 to 440,000. This surge helped push the unemployment rate down to 3.8%, reflecting a strengthening economy.

Leading the employment gains were sectors such as leisure and hospitality, professional and business services, retail trade, healthcare, and construction.

Highlights

• Employment rose by 678,000 jobs, far exceeding projections.
• The unemployment rate fell to 3.8%, below the anticipated 3.9%.
• Average hourly wages remained stable compared to January.

Decline in Unemployment Rate

The unemployment rate dipped from 4.0% in January to 3.8% in February 2022, with the number of unemployed individuals decreasing from 6.5 million to 6.3 million. For context, before the pandemic in February 2020, the unemployment rate stood at 3.5% with 5.7 million unemployed.

Temporary Layoffs and Permanent Job Losses

Temporary layoffs held steady at 888,000, while permanent job losses remained around 1.6 million, both figures higher than pre-pandemic levels of 780,000 and 1.3 million, respectively.

Long-Term Unemployment Steady

The count of long-term unemployed workers (jobless for 27 weeks or more) stayed at 1.7 million, unchanged from January but 581,000 higher than February 2020. This group accounted for 26.7% of all unemployed individuals.

Labor Force Participation Sees Slight Uptick

The labor force participation rate inched up from 62.2% in January to 62.3% in February. Similarly, the employment-to-population ratio increased slightly from 59.7% to 59.9%. Pre-pandemic levels were higher at 63.4% and 61.2%, respectively.

Fewer Potential Job Seekers Outside the Labor Force

The number of people not currently in the labor force but interested in working dropped by 349,000 to 5.4 million. This group was larger than the 5.0 million recorded in February 2020. Discouraged workers, those who believe no jobs are available, decreased modestly from 408,000 to 391,000.

Stable Earnings and Work Hours

Average hourly earnings for private-sector employees rose slightly by one cent to $31.58, following substantial gains in previous months, marking a 5.1% increase over the past year.

The average workweek extended by 0.1 hour to 34.7 hours. Manufacturing saw a 0.4-hour increase to 40.7 hours, with overtime rising by 0.2 hour to 3.6 hours. Production and nonsupervisory workers experienced a 0.1-hour increase to 34.1 hours.

Top Industry Job Gains

February’s largest employment increases occurred in leisure and hospitality (+179,000), professional and business services (+95,000), healthcare (+64,000), construction (+60,000), transportation and warehousing (+48,000), retail trade (+37,000), manufacturing (+36,000), financial activities (+35,000), social assistance (+31,000), other services (+25,000), wholesale trade (+18,000), and mining (+9,000). Together, these sectors accounted for 94% of total job growth.

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