U.S. job growth smashes expectations in February

STORY: The U.S. economy added 678,000 jobs in February, blowing away economists’ forecasts, and lifting hopes that the economy could weather mounting headwinds from the war in Ukraine, rising inflation here at home and, potentially, a more aggressive Federal Reserve.

The surge in hiring last month pushed the unemployment rate down to a two-year low of 3.8%, a two-tenths of a percentage point drop from the 4.0% rate in January. The jobs number for January was also revised higher.

In a tweet, the president of the Economic Policy Institute and former chief economist to the Labor Secretary under President Obama called it "mindbogglingly fast and sustained growth."

But the Labor Department also reported that average hourly wages were flat last month, likely because of the return of workers in lower-paying industries. Companies have been raising wages to attract scarce workers, which is also contributing to higher inflation.

JEROME POWELL: "The labor market is extremely tight."

Fed Chair Jerome Powell this week told lawmakers that the U.S. central bank would be "prepared to move more aggressively" later if inflation does not abate as fast as expected.

The February employment report's flat reading for wages could ease some of those concerns but pressures remain.

Inflation was already a headache before Russia launched a war against Ukraine last week, which has pushed oil prices higher and invoked a barrage of sanctions against Moscow.

One senior economist at Wells Fargo interviewed by Reuters said: "There is plenty of concerning news in the world right now, from the Russia-Ukraine conflict to sky-high inflation, but the U.S. employment recovery continues to be a bright spot amid the carnage."