U.S. economy added 242,000 jobs in February

Mar 04, 2016, 10:50 AM EST
U.S. flag.
Source: Noel Stull/flickr

The U.S. economy added 242,000 jobs in February, raising prospects for another Fed rate hike.

Reuters reports:

U.S. employment gains surged in February, the clearest sign yet of labor market strength that could further ease fears the economy was heading into recession and allow the Federal Reserve to gradually raise interest rates this year. Nonfarm payrolls increased by 242,000 jobs last month, the Labor Department said on Friday. The unemployment rate held at an eight-year low of 4.9 percent even as more people piled into the labor market. "This is the best news the Fed could have expected going into the meeting. With jobs bouncing back, you can be sure that rate hikes are just around the corner," said Chris Rupkey, chief economist at MUFG Union Bank in New York. The economy added 30,000 more jobs in December and January than previously reported. The only blemish in the report was a three-cent drop in average hourly earnings, but that was mostly because of a calendar quirk. The average length of the workweek also fell last month. Economists had forecast employment increasing by 190,000 last month 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 a 1.0 percent annual rate in the fourth quarter. Growth estimates for the first quarter are around a 2.5 percent rate. Fears of a recession in the wake of poor economic reports in December and slowing growth in China sparked a global stock market rout at the start of the year, causing financial market conditions to tighten.

The New York Times writes:

Employment gains showed up in sectors across the board, including retail sales, food services and health care, while the mining sector continued to bleed jobs. The gains came despite heavy snowfall that hit the Northeast, which had caused several analysts to prepare for a weak showing. “If anything, that suggests the results were understated,” Mr. Tannenbaum said, opening the way for even higher revisions in the coming months. William Spriggs, chief economist at the A.F.L.-C.I.O., did caution that some of the unexpected gains in construction might be because of snow-clearing rather than house-building. Despite the improved economic picture, there is still plenty of distress and anger, emotions that have helped spur the success of the Republican presidential front-runner, Donald J. Trump, and rallied many Democrats behind the underdog Bernie Sanders’s attacks on inequality and Wall Street cronyism.

The Washington Post notes:

“I think the realization is finally hitting home, and we’re seeing quite a few employers reevaluate their wage structure, and paying a premium for candidates that they weren’t maybe willing to pay for even three or four months ago,” said Amy Glaser, a senior vice president at Adecco Staffing, a company that pairs with businesses to help them find and recruit workers. A separate survey of households showed that the nation’s job force expanded by more than half a million people — a sign that improving conditions are drawing in those who hadpreviously been on the sidelines. After hitting a low point in September, the labor force participation rate — the share of people holding down jobs or seeking them — has since bounce up half a percentage point, to 62.9 percent. The participation rate has been pulled downward to historical lows in part because of a wave of Baby Boomer retirements. But, to the bafflement of some labor market analysts, middle-aged workers were also exiting. Those workers have started to reenter over the last half-year.