According to the Bureau of Labor Statistics, the US economy added 300,000 non-farm jobs in February. Economists had predicted there would be a gain of 225,000 jobs added over the month.

Although the data showed a slowing of the growth in jobs, some analysts think it will likely not satisfy the Federal Reserve. They predict the central bank will most likely increase the pace of its rate hikes in light of the new data. The next FOMC meeting, where the Fed will hash out the next rate hike will be on March 21-22.

The increases in jobs in February were most prominent among leisure and hospitality, retail trade, government, and healthcare. Following the end of the pandemic, the demand for jobs is shifting from goods to services, causing large increases in the services industry, with leisure and hospitality adding over 100,000 jobs in February.

At the same time, the unemployment rate increased to 3.6%, in its report. The increase in unemployment was speculated to have come down to more Americans entering the workforce in February, as labor force participation increased from 62.4% to 62.5%. The prime age employment participation rate increased from 82.7% to 83.1% – the highest reading since January of 2020, immediately prior to the pandemic.

Conor Sen, founder of Peachtree Creek Investments, speculated of the next rate hike, “I would imagine we get 50 basis points.”

That would be a step upward from the .25% hike that the Fed delivered at the Jan/Feb meeting.

Sen added. “But if you’re worried about structural overheating, the labor supply story is getting better.”

Hourly earnings growth in February was modest, rising only 0.2% on average, compared to 0.3% the previous month, and hourly earnings for production and non-supervisory workers fell by 0.1%. Some argue that although job growth was substantial and above estimates, if the Federal Reserve’s concern over the labor market is wage growth feeding inflation, these numbers could point to a slowing, or even pausing of the Fed’s rate hikes.