US 'is witnessing one of the most fertile employment markets in a generation': Expert

The U.S. job market looks very healthy entering the spring.

"Today’s employment report continued to make one thing very clear — the U.S. economy is potentially witnessing the most fertile employment market in a generation," said Rick Rieder, BlackRock's chief investment officer of fixed income. "Indeed, the labor market recovery has overcome multiple variants of the pandemic, as well as supply chain shocks, which create higher input costs for companies, in turn pressuring profit margins. Still, corporations appear to be barely blinking at all of this and are moving right on ahead with bringing on more workers at ever-increasing cost."

Rieder's hot take on the economy was on full display for February.

The Labor Department reported Friday that the U.S. economy added back the most jobs since July 2021 in February. Non-farm payrolls rose 678,000 in February, easily beating analyst forecasts for 423,000. The unemployment rate ticked down to 3.8% from 3.9% in January.

Jobs for the prior two months were revised up by a total of 92,000.

"It's a very good economic recovery that the president is leading," said U.S. Labor Secretary Marty Walsh on Yahoo Finance Live. "You talk to the financial experts and they will tell you aside from inflation, we have a strong economy now in the United States of America."

Despite the upbeat jobs report, markets tanked as traders fretted about the Federal Reserve being behind the curve on the inflation fighting front. The Dow Jones Industrial Average dropped nearly 500 points in afternoon trading Friday.

Fed Chairman Jerome Powell this week strongly signaled a 25 basis point rate hike at the meeting later this month. But with inflation running rampant in part due to the developing situation between Russia and Ukraine, some pros are questioning whether the Fed needs to be aggressive on rate increases, regardless.

For his part, BlackRock's Rieder thinks Powell & Co. should proceed carefully on rate hikes so as to not disturb the fertile jobs markets in the U.S.

"We continue to see data that shows not only better employment conditions, and particularly for lower- and middle-income workers, but higher wages and improved benefits for that same cohort, which is something that the Fed should be very careful about not disrupting," added Rieder.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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