The US economy added 275,000 jobs last month, more than expected

The construction industry added an estimated 23,000 jobs in February; however, the pandemic effects still loom large for businesses such as DreamOn Group, a San Antonio, Texas-based developer, general contractor and property management firm.

When Julissa Carielo started the company 18 years ago as Texas Premier Building Contractor Inc., she did so with $75,000 pulled from her 401(k) and two employees. By 2019, the company had grown into a multimillion-dollar firm with 65 employees.

However, those ranks shrank dramatically during the past four years. DreamOn’s current workforce is 35 people in size.

“The Baby Boomers retired; we had way too many retirement parties going on and not enough new folks coming in,” she said. “And we are hiring every single week. Every week, we’re looking for workers, and we cannot find them.”

DreamOn Group is one of many businesses affected by worker shortages in the skilled trades.

DreamOn Group previously had an in-house crew to tackle projects such as demolition, concrete work, interior finishes, drywall and painting. Now, the company is leaning more on subcontractors to complete those tasks.

“That’s how we thought we can try to adjust, but I miss the days where we could send our own crew, because it provides a lot more flexibility,” she said.

Read more here.

Tech stocks slid on Friday, pulling the Nasdaq Composite index lower.

The Dow rose 101 points, or 0.3%. The S&P 500 fell 0.03% and the Nasdaq Composite declined 0.2%.

Shares of tech behemoths declined, putting downward pressure on the broader market. Nvidia shares fell 2.7%, Meta Platforms shares lost 0.4% and Microsoft shares fell 0.3%.

Embattled regional lender New York Community Bank saw its stock slip 2.7%.

The S&P 500 is on track to end the week higher. The blue-chip Dow and Nasdaq Composite are on pace to end lower.

Still, the latest jobs report showed that the US economy remains resilient despite interest rates at a 23-year high.

"I’d view this morning’s report as a Goldilocks type of outcome," said Dan Eye, chief investment officer at Fort Pitt Capital Group.

"The downward trend in wage growth and the small uptick in the unemployment rate should continue to support the view that the Fed will be able to start lowering interest rates at some point in the back half of the year," he said.

The price of bitcoin nudged above $70,000 for the first time on Friday morning, as investors continued pouring money into exchange-traded funds pegged to the cryptocurrency amid bets that the Federal Reserve will cut interest rates this year.

Bitcoin has been on a tear following US regulators' approval of spot bitcoin ETFs, which opened the avenue for more traditional investors to add the cryptocurrency to their portfolios.

"The bitcoin ETF train continues to be fueled by record daily volumes and continued strong net inflows, which likely means $70,000 isn’t the end of this crypto journey," wrote Nexo co-founder Antoni Trenchev in a Friday note.

Bitcoin's latest milestone comes after the digital asset on Tuesday surged above $69,000, besting its previous record high of $68,789 reached in November 2021. Shortly after, the price fell below $62,000 a coin.

"Tuesday’s sharp bitcoin selloff was healthy, necessary and a prelude to further gains. Volatility defines bitcoin bull markets and 2024 will be littered with sudden and gut-wrenching 10% to 20% plunges," Trenchev wrote.

President Joe Biden on Friday applauded the February jobs report, which showed that payroll growth continued at a solid clip as unemployment remained below 4% for the 25th consecutive month, the longest stretch in more than 50 years.

US employers added 275,000 jobs in February, a bigger gain than the revised 229,000 jobs added in January, the Labor Department reported Friday. Meanwhile, the unemployment rate edged higher, to 3.9%, which is still low by historical standards and bodes well for the Federal Reserve, which is actively trying to reduce demand to beat inflation.

"Three years ago, I inherited an economy on the brink," Biden said in a statement released Friday. "Now, our economy is the envy of the world."

America's commander-in-chief also pointed to his recent proposals, which he introduced in Thursday's State of the Union address, and which are meant to address a cost of living crisis vexing many Americans.

"Last night, I put forward my vision for America’s future: one where we build the economy from the middle out and the bottom up, where we invest in all Americans, and where the middle class has a fair shot and we leave no one behind," he said.

"I’m taking action to continue lowering costs by taking on Big Pharma, getting rid of hidden junk fees, and making housing more affordable."

Treasury Secretary Janet Yellen told CNN's Kate Bolduan in an interview Friday that the February jobs report points to a resilient US economy and does not have any worrying implications for inflation.

Yellen said there was "really no evidence in this month's wage data of an acceleration in wage increases that could create inflationary pressures."

"Americans are getting ahead, they're getting solid wage increases that exceed inflation, but there is really no evidence of inflationary pressure coming from the labor market," Yellen said. "The US economy is performing better than any advanced nation around the world."

The Treasury chief also touted President Joe Biden's proposals to improve affordability in America's tough housing market, which is currently hamstrung by high mortgage rates, elevated home prices and a chronic under-supply of housing. Those proposals include tax credits and legislation that he says could result in the building and renovation of more than 2 million homes to close the housing supply gap and lower housing costs. Both of those would require congressional action before they go into effect.

"This is really his top priority; making sure that middle-class families in this country can afford a decent life and get help with major expenses that are a burden," Yellen said.

February was yet another month that defied economists' expectations for the number of jobs added.

So why then did the unemployment rate increase to 3.9% from 3.7%?

By definition, the unemployment rate captures the share of unemployed people as a percentage of the labor force. The labor force is the total number of people employed and unemployed. To be considered unemployed, you don’t necessarily have to have been laid off recently.

The Bureau of Labor Statistics classifies someone as unemployed if they aren’t working but are available for work and made a specific effort in the past month to find a job. If they don’t satisfy that criteria, they aren’t considered part of the labor force.

Last month, the number of unemployed people rose by 334,000 to 6.5 million. At the same time, the number of employed people fell by 184,000 to 161 million. The net effect of that meant the labor force grew by 150,000 to 167.4 million.

So, mathematically, when you divide 6.5 million by 167.4 million you'll arrive at the 3.9% unemployment rate.

There's also another wrinkle — the so-called "headline employment number" (i.e. the 275,000 jobs added last month) comes from a different survey than the data that's used to calculate the unemployment rate. (More on that below.)

US stocks were higher after key jobs data came in stronger than expected.

The blue-chip Dow Jones Industrial Average was up 48 points, or 0.1%. The S&P 500 was 0.3% higher, and the tech-heavy Nasdaq Composite was up 0.4%.

Treasury yields fell slightly but remained relatively steady.

New data out Friday showed the US economy added 275,000 jobs in February, surpassing economists' estimates for 200,000.

Strong economic reports are poorly received on Wall Street as they mean the Federal Reserve may need to keep interest rates higher for longer to slow the economy and cool inflation. But markets appear to taking a "good news is good news" approach to Friday's report.

That's because while payrolls came in hot, there was also a sharp downward revision to January's numbers and wage growth tempered.

"The report didn’t necessarily amount to an 'all-clear' signal for the Fed, but there also didn’t appear to be anything in it that would derail its plan to cut rates in the second half of the year," said Chris Larkin, managing director of trading and investing at E*Trade.

Financial markets currently see about a 78% chance the Fed will lower interest rates in June, according to the CME FedWatch Tool.

President Joe Biden, meanwhile, suggested an increase in taxes on ultra-wealthy Americans during his State of the Union speech Thursday night. But so far, investors don't seem to be reacting to the proposal.

Shares of Costco opened 5.4% lower on Friday morning after the mega-retailer beat earnings expectations but missed on sales for the final quarter of last year.

DocuSign soared 5.4% after the company beat earnings expectations and lifted its forward guidance for the year ahead.

Americans' wages grew last month at the slowest pace in two years, reflecting easing price pressures.

Average hourly earnings among private-sector workers edged higher by just 5 cents in February to $34.57. That's an increase of 0.1% from the prior month, well below what economists were expecting and a sharp pullback from the 0.5% gain in January. It was also the slowest monthly increase since February 2022. From a year earlier, wages were up 4.3% in February, well below levels seen in 2022 when the job market was running red hot.

That points to less upward pressure on prices, because employers typically jack up wages to address hiring difficulties, then those costs are usually passed on to consumers. Federal Reserve officials have said they want to see a slower job market to be assured that inflation is on a certain path to their 2% target, including wage growth.

It's also important to factor in productivity to get a true sense of whether or not wage growth stoked inflation, but productivity data for the first three months of the year won't be released until May. It is possible to have strong wage growth if productivity is at the very least keeping up.

Americans' wage gains began to beat inflation last year, and that's still the case unless wage growth unexpectedly slows faster as inflation stalls. The Labor Department releases its Consumer Price Index for February next week.

Other data shows that wage growth is moderating. Payroll processor ADP reported Wednesday that “job-stayers” saw annual pay gains slow to 5.1% in February.

Additionally, Wednesday's JOLTS report showed the quits rate (the number of people quitting their jobs as a percentage of total employment) dipped to 2.1% in January, the lowest since April 2020. Higher quit rates typically correlate to higher wage and price inflation pressures.