WASHINGTON – U.S. employment gains surged in February, the clearest sign yet of labour market strength that could further ease fears the economy was heading into recession and allow the Federal Reserve to gradually raise rates of interest this season.
Nonfarm payrolls increased by 242,000 jobs last month, the Labor Department said on Friday. The unemployment rate held in an eight-year low of four.9 per cent even while more and more people piled into the labor market.
The economy added 30,000 more jobs in December and January than previously reported. The only blemish in the report was a three cent stop by average hourly earnings, but which was mostly because of a calendar quirk.
Economists polled by Reuters had forecast employment increasing by 190,000 recently and the jobless rate holding steady.
The employment report added to data such as consumer and business spending, in suggesting the economy had regained momentum after growth slowed to some 1.0 percent annual rate in the fourth quarter. Growth estimates for that first quarter are around a 2.5 percent rate.
Fears of the recession within the wake of poor economic reports in December and slowing development in China sparked a worldwide stock market rout at the start of the entire year, causing financial market conditions to tighten.
Financial markets have priced out bets of the rate rise at the Fed’s March 15-16 policy meeting and the probabilities for rate increases for the rest of the entire year remain rather small.
The strong jobs market and improved growth outlook, together with signs that inflation is creeping up, could prompt the U.S. central bank to lift borrowing costs in June. The Fed raised its key overnight interest rate in December the very first time in nearly a decade.
SLOWER WAGE GROWTH
Fed Chair Janet Yellen has said the economy must create just below 100,000 jobs per month to maintain development in the working-age population.
The work force participation rate, or the share of working-age Americans who are employed or at least searching for a job, increased two-tenths of the percentage indicate 62.9 per cent.
While wage growth weakened in February, it had been largely payback for January’s jump, which was driven with a calendar quirk. Development in wages is seen accelerating because the labor market settles into full employment.
The drop in average hourly earnings lowered the year-on-year grow in earnings to 2.2 percent.
In February, job gains were almost broad-based, though manufacturing and mining employment fell. The services sector created 245,000 jobs after adding 153,000 jobs in January. Mining lost a further 18,000 jobs after shedding 9,000 positions in January.
Mining payrolls have declined by 171,000 jobs since peaking in September 2014, with three-fourths of the losses in support activities. More losses are most likely after oilfield services provider Halliburton Co said last month it might cut an additional 5,000 jobs because of a prolonged slump in oil prices.
Manufacturing employment lost 16,000 jobs, reversing a number of January’s surprise increase. Private education jobs rebounded after plunging in January. Construction payrolls increased 19,000 and government added 12,000 jobs.
? Thomson Reuters 2016
