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February jobs report: US added 678,000 jobs in sign of economic health

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WASHINGTON - U.S. employers added a robust 678,000 jobs in February, another gain that underscored the economy’s solid health as the omicron wave fades and more Americans venture out to spend at restaurants, shops and hotels despite surging inflation.The Labor Department’s report Friday also showed that the unemployment rate dropped from 4% to 3.8%, extending a sharp drop in joblessness as the economy has rebounded from the pandemic recession.The latest jobs data follows recent reports that have shown an economy maintaining strength as new COVID infections have plummeted since late January.

Consumer spending has risen, spurred by higher wages and savings. Restaurant traffic has regained pre-pandemic levels, hotel reservations are up and far more Americans are flying than at the height of omicron.Average hourly pay barely rose last month but has increased 5.1% in the past year, a sign that companies feel compelled to raise wages to attract and keep workers.

Many employers, in turn, have been raising prices to offset their higher labor costs, a process that has fueled inflation.Consumer inflation has reached its highest level since 1982, squeezing America’s households and businesses, with price spikes especially high for such necessities as food, gasoline and rent.

In response, the Federal Reserve is set to raise interest rates several times this year beginning later this month. Those increases will eventually mean higher borrowing rates for consumers and businesses, including for homes, autos and credit cards.FILE - A "we're hiring" sign is displayed at Starbucks in Beverly Hills on February 04, 2022 in Los Angeles, California. (Photo by Alexi Rosenfeld/Getty Images) Chair Jerome Powell said this week that he plans to.

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