Februaryjobsroseasurprisinglystrong678,000,unemploymentedgedlowerwhilewageswereflat

JobgrowthacceleratedinFebruary,postingthebiggestmonthlygainsinceJulyastheemploymentpicturegotclosertoitspre-pandemicself.

Nonfarmpayrollsfor themonthgrewby678,000andtheunemploymentratewas3.8%,theLaborDepartment'sBureauofLaborStatisticsreportedFriday.

Thatcomparedwithestimatesof440,000forpayrollsand3.9%forthejoblessrate.

Inasignthatinflationcouldbecooling,wagesbarelyroseforthemonth,upjust1centanhour,or0.03%,comparedwithestimatesfora0.5%gain.Theyear-over-year increasewas5.13%,wellbelowthe5.8%DowJonesestimateasmorelower-wageworkerswerehiredand12-monthcomparisons helpedmutemorerecentgains.

Forthelabormarketbroadly,thereportbrought thelevelofemployedAmericansclosertolevelsbeforetheCovidcrisis,thoughstillshortby1.14million.Laborshortagesremainamajorobstacletofillthe10.9millionjobs thatwereopenattheendof2021,ahistoricallyhighgapthathadleftabout1.7vacanciesper availableworker.

Atleastfromanemploymentperspective,theFebruaryreportconfirmsthat therampantomicronspreadduringthe winterhadlittleimpact.

"Thisreportindicatesthatthe jobmarketishealthyandresilienttotheebbsandflowsofthepandemic,"saidDanielZhao,senioreconomistforjobplacementsiteGlassdoor."We'veseenthatjobgainshavebeen over400,000for 10monthsinarow.'

"Thelabormarketrecoveryremainsveryrobustacross theboardasmoreAmericansarereturningtowork,"addedEricMerlis,managingdirectorofglobal marketsatCitizensFinancialGroup."GeopoliticalissuesandinflationposeongoingthreatstotheU.S.economicrecovery,butpandemicrestrictionsarebeinglifted andwecontinuetoseestrongjobgrowth."

Markets,however,reactedlittletothenewsasinvestorsremainfocusedontheRussia-Ukrainewar.Stocksfellthroughthe dayFridayandgovernmentbondyieldsweresharplylower.

Ashasbeenthecaseformuchofthepandemicera,leisureandhospitalityledjobgains,adding179,000forthemonth.Thejobgapforthatsector,whichwas hitmostbygovernment-imposedrestrictions,is1.5millionfrompre-Covidlevels.

Theunemploymentratefortheindustrytumbledto6.6%,aslideof1.6percentagepointsfromJanuaryandclosertothe5.7%ofFebruary2020.Wagesactuallydeclinedslightly,falling2centsanhourto$19.35.Theincreaseinhiringforbars,restaurants,hotelsandothersimilarbusinesseslikelyiscontributingtotheslowerpaceofpayincreases.

"We'regettingbacktopre-pandemiclevelsintermsoflaborforceparticipation.Jobgrowthisstillquitehealthyandstrong.Sothingsarereallygood,"saidKathy Jones,chieffixedincomestrategistatCharles

Schwab."Asmorepeoplecomebacktoworkandparticipationpicksup,thelevel ofwagegainsshouldstarttosubsidealittlebit.IntermsoftheFedworryingaboutinflationdrivenbypeoplemakingmoremoney,Iguessthat'sgoodnews."

Othersectorsshowingstronggainsincludedprofessionalandbusinessservices(95,000),Healthcare(64,000),construction(60,000),transportationandwarehousing(48,000)andretail(37,000).Manufacturingcontributed36,000andfinancialactivitiesrose35,000.

https://www.cnbc.com/2022/03/04/jobs-report-february-2022.html

1.AsaneconomicadvisorintheWhiteHouse,itisyourresponsibilitytointerpreteconomic

dataandmakerecommendationsto thePresident.

A.Currentstateoftheeconomy.

i.Explainwhetheryoubelievethecurrenteconomyisbelow,atorbeyondfullemployment

ii.Drawacorrectlylabeledgraphoflong-runaggregatesupply,short-runaggregate

supply,andaggregatedemand,andshoweachofthefollowing:

a)Currentequilibriumoutputandpricelevel,labeledasY,andPL1.b)Full-employmentoutput,labeledasYf.

B.RecommendationtothePresident.

i.Givenyouranswerin1Ai,explainwhatspecificfiscalpolicyyourecommendfor

eachofthefollowing:a)Taxesb)Governmentspending

ii.Assumeyourrecommendationsare accepted,demonstratetheimpactofthepolicies

onthegraphin1A.IdentifythenewoutputandpricelevelsasPL2andY2.

C.GivenyourexpertiseandevaluationofthecurrentstateoftheeconomyinAi,explain

howyouwoulddirectlyrespondtothePresidentregardinghiscallforexpansionarymonetarypolicybyaddressingthefollowing.

i.Definemonetarypolicy

ii.Explaintheimpactofexpansionarymonetarypolicyon

a)Pricesb)Output