US Economy Added 236,000 Jobs In February
Hiring in the US has gathered momentum after government figures showed that the economy created 236,000 jobs in February.
The figure was much higher than analysts had expected, and more than the 157,000 jobs created in January.
The unemployment rate fell to 7.7% last month, the lowest since December 2008, from 7.9% in January, figures showed.
But the White House’s chief economist said more work was needed as Congress remained divided over economic policy.
Progress ‘unmistakable’
Employment growth has risen by an average of 195,000 a month in the last three months, figures show. Analysts had forecast a rise of 165,000 jobs for February.
Following the release of the jobs figures, stocks on Wall Street opened higher with the Dow Jones index up 62.23 points at 14,391.72. The dollar also gained against the euro and the yen.
Professional and business services added 73,000 jobs last month, while the construction industry hired 48,000 employees. The health care industry added 32,000 jobs and the retail sector added 24,000 new staff.
Only government lost 10,000 jobs in February, mostly in local education. The public education sector has now lost 340,700 jobs since its 2009 peak.
But the number of long-term unemployed – out of a job for at least 27 weeks – was unchanged, accounting for about 40% of the jobless total.
“Progress in the labour market is unmistakable. The economy is producing more than twice as many jobs as it did at the low point in the second quarter of last year,” said Joseph Trevisani, chief market strategist at Worldwidemarkets.
But he warned that optimism was “relative”, because of slow economic growth. The economy in the October-December quarter made modest gains, growing at an annualised rate of just 0.1%.
Analysts are now debating whether the labour market is strong enough to weather a series of public spending cuts, known as the sequester, and whether the Federal Reserve will continue with its loose monetary policy.
The latest jobs report takes into account the period before the sequester officially began on 1 March.
Last week, President Barack Obama signed into effect spending cuts worth $85bn (£56bn), although he warned that the cuts – if fully realised – would slow US economic growth by 0.5% and cost 750,000 jobs.
The sequester was drawn up in mid-2011 as Congress and the White House feuded over raising the debt ceiling and how to slash the huge US deficit.
Republicans wanted deep cuts in spending, while Democrats insisted on raising taxes as part of any plan to tackle the country’s $16.6 trillion debt.
Cautious reaction
Alan Krueger, chairman of the White House Council of Economic Advisers, said: “While more work remains to be done, today’s employment report provides evidence that the recovery that began in mid-2009 is gaining traction.”
The White House continued “to urge Congress to move toward a sustainable Federal budget”, he said, and warned against “reading too much into any one monthly report” as payroll estimates were volatile and could be revised substantially.
John Boehner, the Republican Speaker of the House, said: “Any job creation is positive news, but the fact is unemployment in America is still way above the levels the Obama White House projected when the trillion-dollar stimulus spending bill was enacted, and the federal government’s ongoing spending binge has resulted in a debt that exceeds the size of our entire economy.”
The US Federal Reserve has said it will keep interest rates close to zero and will continue buying $85bn of bonds a month until there is a substantial improvement in the labour market.
Jacob Oubina, senior US economist at RBC Capital Markets, said: “This was a strong number and one of those rare cases where we were firing on all cylinders. Having said that, this will likely not mean much for Fed policy as they will need to see more than one month of strong numbers and if it is sustained.”
BBC
