U.S. Job Growth Continues to Surpass Expectations

The U.S. labor market has remained resilient in the face of high interest rates. In February, job creation exceeded expectations, but the unemployment rate moved higher.

Employers added roughly 275,000 workers to payrolls in February 2024, according to a survey of businesses by the Bureau of Labor Statistics (BLS). That was an improvement over the 229,000 jobs gained in January (which was revised down), and the second-biggest one-month gain since May 2023. In addition, recent job gains came in above what economists were forecasting (+200,000 jobs).

Of note: The job counts for December and January were revised considerably lower. Downward revisions to December 2023 data showed 43,000 fewer jobs were added than previously reported, down from 333,000 to 290,000 positions. The January 2024 job growth number was also revised down, decreasing by 124,000 jobs to a total of 229,000 positions. With these revisions, employment gains in December and January combined were 167,000 jobs lower than previously reported.

Recent job gains were above the monthly average of around 251,000 jobs added throughout calendar 2023 and were ahead of pre-pandemic norms. From 2015 to 2019, the U.S. economy added an average of roughly 190,000 jobs each month.

On an annual basis, the nation gained more than 2.7 million jobs in February 2023. Although that was the weakest annual gain since March 2021, it was above the pre-pandemic average of around 2.4 million jobs added annually from 2015 to 2019.

The U.S. economy has recovered all the net jobs lost during the COVID-19 pandemic. As of February, the nation had nearly 5.5 million more jobs (+3.6%) compared to the pre-pandemic employment level from February 2020.

Jobs by Industry

Job growth in February was seen in nine of 11 major industry sectors. The most notable job base expansion was in Education and Health Services (+85,000 jobs). Solid gains were also recorded in Leisure and Hospitality Services (+58,000 jobs), Government (+52,000 jobs), Trade, Transportation and Utilities (+40,000 jobs) and Construction (+23,000 jobs). Smaller job gains were seen in Financial Activities (+1,000 jobs), Information (+2,000 jobs), Other Services (+9,000 jobs) and Professional and Business Services (+9,000 jobs).

The Manufacturing sector was the only major industry to lose jobs from January to February. That industry lost 4,000 jobs during the month. Meanwhile, the employment count in the Mining and Logging industry was essentially unchanged from January to February.

Most major industries have recovered all the jobs lost during the COVID-19 pandemic downturn. Professional and Business Services has seen the best recovery, with the recent job count coming in roughly 1.49 million positions ahead of February 2020 numbers. Also well ahead of pre-pandemic norms were Education and Health Services (+1.45 million jobs) and Trade, Transportation and Utilities (+1.16 million jobs).

Alternatively, some of the harder-hit sectors remain below pre-pandemic job counts. Despite recent gains, employment in the Leisure and Hospitality Services sector is still below pre-pandemic employment counts (-17,000 jobs). Other industry sectors yet to recover all the jobs lost during the COVID-19 downturn include Other Services (-60,000 jobs) and Mining and Logging (-44,000 jobs).


The unemployment rate (U3 or headline unemployment rate, which is seasonally adjusted, is a survey of households) rose 20 bps from January to February registering at 3.9%, the highest rate since January 2022. The recent rise in the unemployment rate was not what economists were projecting, which was for the rate to remain unchanged. The increase came even though the labor force participation rate remained unchanged at 62.5%. Still, the nation’s unemployment rate has remained below 4% for over two years, the first such occurrence since the late 1960s.

Since February 2022, the unemployment rate has been in a narrow range of 3.4% to 3.9%, averaging 3.6% during that period. At the onset of the pandemic, the unemployment rate climbed to 14.8% in April 2020. Prior to the pandemic, the unemployment rate clocked in at 3.5% to 5.7% from 2015 to 2019, averaging 4.4% during that five-year period. Prior to 2023, the unemployment rate hadn’t registered below 3.5% since 1969.

The total number of unemployed persons in the U.S. registered at nearly 6.46 million in February, up from about 6.12 million in January.

The unemployment rate for adult men (20 years and over) decreased 10 bps from January to February, to 3.5%. The unemployment rate for adult women (20 years and older) increased 30 bps to 3.5%. Meanwhile, the unemployment rate for teenagers (16 to 19-year-olds) rose 190 bps from 10.6% in January to 12.5% in February.

Average Hourly Earnings

Average hourly earnings among employees on private nonfarm payrolls rose $0.05 (+0.1%) from January to February. That monthly increase took average hourly earnings to $34.57 in February. On an annual basis, average hourly earnings were up $1.42, a 4.3% increase year-over-year. Overall wage growth continues to surpass rising prices, as the Consumer Price Index (CPI) rose 3.1% annually in January. The Fed’s target for inflation is currently at 2%.

Wage growth over the past year was strong across most major industries. The largest increases in earnings from February 2023 to February 2024 were recorded among workers in Mining and Logging (5.9%), Financial Activities (5.8%), Manufacturing (5.3%), Other Services (5.3%), Construction (4.7%) and Leisure and Hospitality Services (4.7%). The smallest increases were among employees in Information (1.8%), Trade, Transportation and Utilities (3.7%), Education and Health Services (3.8%) and Professional and Business Services (4.3%).