It’s almost official. The Federal Reserve will raise rates on March 15. One reason: the U.S. job market is booming. Inflation is coming.
The U.S. economy created 298,000 new jobs in February, beating consensus estimates by more than 100,000 hires. In January, the U.S. job market led to 246,000 new hires. Construction and manufacturing created the most jobs in the goods producing segment of the economy, while professional services firms hired an estimated 66,000 people last month. Small businesses hired 104,000 and mid-sized companies added 122,000 people to payroll. Large corporations of 500 employees-plus, hired 72,000 people last month.
The ADP payroll figures are the best piece of news for new president Donald Trump. This is the first set of hard economic numbers from his presidency. Many companies have been suggesting heading into this year that they were optimistic about hiring. Business sentiment surveys have been on the rise since November, even as companies see high capital costs on the horizon. What we can tell is that no one is worried about a 25 basis point rate hike.
On Wednesday, Trump Tweeted out a LinkedIn workforce report showing new hiring has been taking place since January. January and February were the strongest consecutive months for hiring since August and September 2015, the president tweeted.
The U.S. job market is continuing its strong run. Unemployment benefit claims are the lowest in almost 44 years. The ADP figures provide some insight ahead of Friday’s release of the Labor Department’s monthly employment report, which is projected to show a 190,000 increase in private jobs.