Economic Watch: Trucking Helps Boost Overall Employment Ahead of Fed Meeting
Job growth in the U.S. posted another healthy gain in February, according to a new Labor Department report, leading many analysts to predict an interest rate hike by the Federal Reserve when it meets next week.

Job growth in the U.S. posted another healthy gain in February, according to a new Labor Department report released Friday, leading many analysts to predict an interest rate hike by the Federal Reserve when it meets next week.
A total of 235,000 non-farm jobs were added during the month, better than the 221,000 level expected in a consensus estimate of economists. This pushed the nation’s unemployment rate down slighly to 4.7%, as more people entering the labor force and fewer people giving up the job hunt partially offset the gains. Weekly jobless claims remain close to a 44-year low, according to separate Labor Department figures released Thursday.
Job gains for January and December were revised slightly higher for an additional 9,000 more jobs than previously reported, for a total of 393,000 jobs added during the two months.
The report follows one from payroll processor ADP showing there were 298,000 private job gains in February -- again, far better than expected.
According to Friday's jobs report, job gains in February were strong in construction, manufacturing and health care.
There were 10,600 for-hire trucking jobs added last month, while the wider transportation and warehousing sector posted a gain of 8,800. Job losses in warehousing and storage brought down that number.
What This Means to the Fed
Given comments from Federal Reserve officials, including Fed Chair Janet Yellen, it would have taken a significant downside surprise in the jobs report to derail market expectations of an interest rate increase. Even before the jobs report, the market already was pricing in about a 90% probability of a 0.25% hike in the federal funds target range, explained Nathan Janzen, senior economist at RBC Economics Research.
“We continue to expect a 25 basis point rate hike from the Fed next Wednesday,” he said. “With an increase in rates, barring some unexpected shock...attention is likely to shift to the expected pace of future hikes (previous Fed projections suggested three hikes were felt to be appropriate this year), with a stronger economy arguing higher rates are needed but with considerable uncertainty remaining in the outlook, particularly around the future of U.S. government policy.”
The Friday report also showed wages increased 0.2% in February, raising the annual pace to 2.8% after last month’s weakness. Still far from robust, improved wage growth will make many Fed officials much more comfortable with higher interest rates, said Lindsey Piegza, chief economist at Stifel Fixed Income.
"This morning’s report had it all, making it very difficult for the Fed, at this point, to rescind on their hawkish commentary, which has all but promised a rate hike at next week’s meeting," she said.
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